Meralco eyes power generating companies

MANILA, Philippines - Power giant Manila Electric Co. (Meralco) is eyeing to buy into some existing power generation companies in preparation for the open access.

“We have under consideration some preliminary discussion but it’s too early to say. We are talking to some, those who have been privatized for example, maybe buy into them,” Meralco president Jose de Jesus told reporters over the weekend.

De Jesus said the plan is also consistent with its effort to ensure that there would be enough supply of power in its franchise area.

At present, he said the company has started exploring talks with some power plant owners for possible buy-in schemes.

Two of Meralco’s minority owners, the Lopez Group and San Miguel Corp. (SMC) have power generation assets.

Meralco currently gets majority of its supply requirements from its affiliated power generation producers – First Gas Corp.’s Sta. Rita and San Lorenzo natural gas-fired power plants.

SMC’s subsidiary, San Miguel Energy Corp. (SMEC), now owns Sual coal-fired power plant contracts and Limay diesel power facility.

It would also be noted that the Philippine Long Distance Telephone Co. (PLDT) Group, also one of the stockholders of Meralco along with the Lopez Group and the Ayala Group, joined forces to acquire some power generating assets that will be privatized soon by the Power Sector Assets and Liabilities Management Corp. (PSALM).

Once open access kicks in, qualified consumers with one megawatt (MW) demand, could have a free hand to choose where to source their power needs.

Open access is expected to happen once PSALM privatized 70 percent of IPP administrators (IPPAs). Another prerequisite for open access which is the privatization level of 70 percent for power generating assets have alread been achieved.

Based on Meralco estimate, about 25 percent of its total sales of around 27,000 kilowatt-hours last year would be opened up to the retail power market once open access commences.

“We will need other source of supply because what we have now is not even sufficient for our captive market,” he said.