Meralco’s Jan-Feb sales steady at 5.5 percent

By Lenie Lectura – March 15, 2018
from Business Mirror

ENERGY-sales volume of the Manila Electric Co. (Meralco) in the first two months of the year stood at 5.5 percent, company President Oscar Reyes said.

“In January we were 5.6 percent, and February was trending at 5.3 percent,” Reyes said. “I think the first two months we are averaging 5.5 percent.”

The utility firm’s volume of energy sold for 2017 reached 42,102 gigawatt hours (GWh), 5 percent higher than in 2016. Reyes said last year’s energy sales was the first time in Meralco’s 115-year history that sales for each month exceeded 3 GWh.

The combined effects of a growing customer base, positive economic conditions, stable power supply and lower power-plant outages contributed to the robust energy sales performance last year, Reyes said.

This year Meralco is hoping for another record sales growth. Reyes noted “summer came in early” this year.

“It’s not yet summer but, normally, demand for January is low because of the cool weather, but it seems summer came in early,” he said. “Meralco is making sure that we have ample supply for summer when demand is strong.”

Reyes cited the power-supply agreements (PSA) it entered into, and will be signed with various power producers to keep power supply steady.

“We don’t know when power plants will conk out. These are 15-year-old to 20-year-old plants. But we have ILP [interruptible load program], and we are conducting price challenges to augment the capacity we need,” Reyes said.

Meralco’s web site defines the ILP as a voluntary, demand-side management program that allows customers to operate their generating sets and collectively reduce electricity drawn from the grid when power interruptions are imminent to ration limited power supply.

According to Reyes, the company “also signed contracts for wind.”

Meralco earlier entered into long-term PSAs with Solar Philippines Power Project Holdings Inc. and PowerSource First Bulacan Solar Inc.

Solar Philippines will supply 50 megawatts at a base price of P5.39 per kilowatt hour. Another PSA states that Solar Philippines could further supply Meralco with 75 MW to 85 MW for five years and another 85 MW from the sixth up to the 20th year for P2.9999 per kWh, which is significantly lower than the prevailing solar feed-in-tariff (FIT) rates, Solar Philippines claims. PowerSource First, meanwhile, will supply Meralco 50 MW for P4.69 per kWh.

Meralco and First NatGas Power Corp., a wholly owned subsidiary of First Gen Corp., have entered into a PSA for the supply of 414 MW for P3.77kWh.

Power will be sourced from the Lopez-led firm’s 414-MW San Gabriel combined cycle natural gas-fired power plant in Batangas City.

The term of the PSA is six years using gas from the Malampaya field but, in the event that liquefied natural gas becomes available, the term of the PSA could be extended upon mutual agreement with Meralco.

The PSA between Meralco and First NatGas, however, require the green light of the Energy Regulatory Commission (ERC). The application is still pending with the commission.

Meanwhile, a price-challenge offer is being conducted for the 50-MW wind-power capacity output of Pilipinas Newton Energy Corp. at P2.98 per kWh.

While there is an initial agreement with Newton on price and terms, the finalization of the PSA will have to wait for completion of the price-challenge process. Newton’s price offer is now undergoing a competitive selection process (CSP), which is being administered by the ERC bids and awards committee.

Under a CSP regime, another interested bidder could challenge the original offer. After the CSP has been successfully concluded, both parties must seek approval from ERC before their PSA is implemented.

Meralco said it foresees high demand, thus there is an urgent need for the final approval of the PSAs considering a significant peaking capacity deficit, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants.

Based on the utility firm’s distribution-development plan for 2015 to 2020, Meralco’s aggregate capacity requirement is forecasted to grow by a compounded average growth rate of 3.7 percent.