How to reduce PPA

There appears to be one surefire and foolproof solution to be able to bring down the power purchase adjustment (PPA) charges.

This is to allow the Manila Electric Company (Meralco) to maximize the utilization of its independent power producers (IPPs). Meralco has long been asking that it be allowed by the National Power Corp. (Napocor) to buy more electricity from its IPPs, with the firm assurance that PPA charges would substantially go down automatically.

However, Meralco’s request has been rejected for two reasons. The first is that Republic Act No. 9136 (Electricity and Power Industry Act) restricts power distributors like Meralco from sourcing more than 50 percent of their energy requirements from affiliated power generation companies. The second is that Meralco’s three IPPs (Quezon Power, and the Sta. Rita and San Lorezon plants of First Gas) have not been allowed by Napocor to operate even at minimum energy quantity or MEQ levels, since the three started commercial operations.

Since a reduction of the PPA would benefit the entire economy, it is therefore difficult to comprehend why Napocor would stubbornly refuse to allow Meralco to prove its claim that it can drastically reduce PPA charges if allowed to utilize its IPPs even at just MEQ levels.

According to Meralco, the recent average 10 centavo per kwh increase in its PPA this month over the February level could have been averted had Napocor given the greenlight.

Granting that indeed, Napocor is hobbled with systems/transmission constraints, what will it do about it? Curiously, Napocor never experiences these constraints when delivering power to its biggest customer, Meralco, which accounts to around 60 percent of its total energy sales.

Can Napocor meet the challenge?

Readers’ reactions

 The reaction of Metro Rail Transit Authorities project manager Mario Miranda is predictable. The ax is about to fall on his head and before his head gets chopped off, he looks up to see who holds the sword about to cut his link to a coveted position.

He not only looks up, though. He has issued press releases, seemingly harmless and supposedly not traceable to him, that tends to cloud some doubt into the act of replacing him with a retired police officer. At times he has even gone further by ascribing evil motives to some of Secretary Mendoza’s actuations.

These are inevitably signs of a desperate man. And like most desperate men he may tend to overstep. I hope he will be more careful the next time he crafts up another an anti-Mendoza release. He may be called to account for it.

 What should have been priority in his coconut shell was to determine how and where he has failed to meet up to the expectations of the Boss so he could do better. He should likewise realize he occupies a position in the government bureaucracy that depends on the decision and convenience of those higher up the ladder. And they may not even have to justify his replacement. It is a question of trust and confidence. By the way he reacts, the loss of trust and confidence then is justified.

But what is there at the MRTA that Miranda now wants to stick to the general managership like a leech? Just asking. — Name withheld upon request.

Quote for the day

"I’m not interested in a political career, but thanks." — Globe Telecom chairman Jaime Augusto Zobel de Ayala, when asked whether he would be interested in running for President of the Republic.

For comments, e-mail at [email protected]