Why MERALCO is “Right” and Why you Should not Vote for Loren Legarda
I always get pissed every time a politician in the Philippines is buying the idea that MERALCO is wrong in purchasing most of its energy requirement from its IPPs – First Gas Holdings Corporation and QPPL Limited. According to them, the cost of power of NPC is much “lower”.
Sen. Loren Legarda is questioning why Meralco continues to buy power at more expensive rates from the Lopez family-owned independent power producers, when the National Power Corp. (Napocor) offers cheaper prices.
Citing a report by the National Association of Electricity Consumers for Reforms (Nasecore), Legarda said the Manila Electric Co. (Meralco) bought more than 50 percent of its power needs from Lopez plants at an average cost of P5.38 per kilowatt-hour.
Napocor’s price for August was only P3.57 per kilowatt-hour, and even the Wholesale Electricity Spot Market (WESM) pricing was only P3.09. The national association said it got the data from Meralco’s own website.
- Manila Times, September 08, 2008.
Yes, NPC price is literally lower because it is losing bunch of money which in turned, will be paid by the same consumers through loans that NPC have incurred by selling electricity at unreasonably low price. Of course don’t forget the interest rate. It’s an idiot thinking to compare NPC, a public utility, and a private generation company like MERALCO IPP’s because NPC can always afford to loss money at the expense of all tax payers in the Philippines. In today’s issue of Philippine Daily Inquirer, BSP OK’s transfer of $400-M Napocor debt. Yes, a whooping $400 Million or Php18 Billion.
Plus, why is it hard for them to realize that MERALCO and its IPPs are bounded by their power purchase contract, a contract that brought MERALCO to enter on due to inefficiencies of NPC to deliver a guaranteed and reliable source of power?
Lastly, I won’t let this issue pass without some technical consideration. Why are they comparing the generation cost alone and not considering the transmission charges? I would like to remind Loren Legarda and Nasecore, as well, that the overall cost of MERALCO bill is not a linear function of the generation cost alone. You need to consider the load profile, TOU rate and Transco wheeling charges to come-up with an optimal mix. I remember that even Prof. Rowaldo del Mundo, failed to consider the wheeling charges of TransCo in his analysis of the optimal generation mix for MERALCO in his paper, “Analysis of Power Supply Purchases of MERALCO for year 2007”, that is why he came-up with a high generation cost charged by IPP’s to MERALCO.
I’m not a MERALCO fan and I entertain the idea that MERALCO could really be wrong but please show a scientific proof and calculation so that it cannot be use by PR-hungry politicians.
What I certainly understand about this politicians why they are doing this is that they are politicians, sorry but I think, the traditional one – TRAPO. That is why I don’t believe them and definitely DON’T vote for them in the 2010 election.
Filed in: MERALCO
Local date: March, 2010
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