e can’t make heads
or tails of Gloria Arroyo’s statements last week before the Federation of
Philippine Industries on the purported reduction of power rates. First, she said
the National Power Corp. has reduced its selling price to Manila Electric Co.
following her directive last February. Second, she said that to further reduce
rates, Meralco should be stopped from buying power from Napocor during peak
hours.
On her first claim, it is news to us that Napocor has cut its
selling price. In fact, power prices have been rising since March because some
Napocor coal plants have not been running for lack of fuel. This prompted to
Napocor to fire up its more expensive oil-fired plants to take up the slack. A
check with the generation charge portion of Meralco billings will confirm this
rise in Napocor rates.
And if indeed Napocor has been following instructions from
Gloria to cut selling cost, both of them have deliberately been sabotaging the
Electric Power Industry Restructuring Act by manipulating prices in the
wholesale electricity spot market.
On the proposal that Meralco be compelled to stop buying from
Napocor its peak power needs, where then would Meralco buy power during periods
of high demand?
The current set-up runs like this. Meralco has a 25-year
supply contract with the Santa Rita and San Lorenzo gas plants with a combined
capacity of 1,500 megawatts, among other independent producers. Output from the
independent producers is delivered by Meralco to its consumers 24 hours a day.
The baseload is supplemented by purchases from Napocor representing about 50
percent of Meralco’s requirements.
This results in higher prices for Napocor power for the very
simple reason that Napocor’s plants are tapped only during certain periods of
the day (intermediate and peak demands). Meralco, of course, can enter into a
long-term supply contract with Napocor for peak demand power. But doing so would
not significantly lower prices of Napocor because, as we said earlier, its
plants are only run intermittently.
What, it may be asked, would result if Napocor plants were
run full blast? Selling prices would no doubt drop sharply. But that would mean
Napocor plants supplanting Santa Rita and San Lorenzo as Meralco’s source of
baseload power.
Gloria could dream, but that would never happen. Santa Rita and San Lorenzo
are owned by the Lopezes. They just happen to be in control of Meralco.
