NPC-Meralco settlement deal stalls
Friday, April 28, 2006
By MYRNA M. VELASCO
Parties involved in the P20-billion net settlement agreement resolving power contract dispute between state-owned National Power Corporation (NPC) and Manila Electric Company (Meralco) indicated that such concern will momentarily take the back seat in lieu of new deals being firmed up for the "offer of supplier choice" to large customers.
When categorically asked if the settlement deal will be set aside, Meralco president Jesus P. Francisco said "we are not even talking about the settlement agreement…in lieu of that, the focus is now on this offer of choice to the 1.0 MW customers."
But NPC president Cyril del Callar was more circumspect in saying that rendering a ruling on the pending settlement agreement lies in the evaluation and appraisal of the Energy Regulatory Commission.
Though parties never acknowledged that the "de facto open access" offer to industrial and commercial customers have some conditions; parties are indicating things clearer that preconditions are tied to it – and this included putting in the back burner the settlement agreement and the need to rule out any rush for them to sign up transition supply contracts.
Francisco, likewise, revealed that the settlement amount has already been reduced to P14.3 billion; based on revised computations at the end of their contract term on December 31, 2004.
But when asked separately, Del Callar revealed that there was no change of position on their part from the first joint filing they had with ERC; implying that the amount to them still stands at P20 billion.
"We are not even asked by the ERC to give our comments, so how can we agree to that P14 billion?," the NPC chief executive has stressed.
Meanwhile, both NPC and Meralco, with the inclusion of the National Transmission Corporation, declared that they have already agreed on "optimization plan" on the dispatch of power plants contracted by both parties.
The power firms are hinging that such arrangements will turn out successful in view of forecasted growth in demand, whereby Meralco sales is seen growing at average 2.8 percent this year.
Francisco said that the industries will have the option to avail of the time-of-use (TOU) rates of NPC; which are relatively cheaper during off-peak periods primarily at night time; while the independent power producers of NPC will be having maximized dispatch at day time.
Based on Meralco’s initial calculation, it was noted that the IPPs would contribute at least 54 percent of its supply; and this will already redound to dispatch of the plants at contract levels or minimum energy quantity.
When this happens, Francisco stressed that the utility firm’s captive customers; which are mostly residential and smaller commercial end-users will benefit from roughly P0.18 per kilowatt hour (kWh) reduction in electricity rates that they will have to pay for.
While pricing scheme and contractual arrangements are still being settled for its large customers, Meralco emphasized that "the arrangement is not a direct connection nor an open access arrangement;" but just an opening to provide its large consumers the option to avail of NPC’s time-of-use rates.
posted by philpower @ 6:22 PM,