Palace assures public of steady power supply

MANILA, Philippines - Malacañang yesterday called on the Manila Electric Co. (Meralco) to stop warning the public of tight power supply this summer since the Aquino administration has repeatedly stated that there is enough supply, except in Mindanao.

“There is no tightness of supply in Luzon and the Visayas compared to Mindanao,” Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office pointed out, reassuring consumers of steady power supply both in Luzon and the Visayas.

“Let’s look at the bigger picture. In the big picture, in the overall picture, Luzon and the Visayas have enough supply of power,” he told newsmen, adding government strictly monitors the power industry to ensure steady and stable power supply.

“That is always the key. The task of government is to ensure enough supply,” he said.

This developed as electricity rates at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity, in December 2013 and January 2014 should have been only around P6 per kilowatt-hour instead of the P22 to P25 per kwh, according to the rates recalculated by the Philippine Electricity Market Corp. (PEMC), the spot market operator.

At the same time, Coloma advised Meralco management and as well as critics not to paint a picture of looming power outages at the onset of summer, which is expected to last until June.

“Instead of drawing scenarios that create only fear, it would be better if we focus our attention on positive steps, like what the government is doing to ensure the steady supply of power and prevent power outages. That is our focus,” Coloma emphasized.

According to him, the Department of Energy (DOE) under Secretary Jericho Petilla is monitoring developments in the power industry, like the base load of power plants on an hourly basis and on a 24-hour cycle.

“If we have stable power supply, then there would be no unusual spikes in the prices of power. That’s why the government is focusing on this. The situation is very dynamic, it is not static,” Coloma added.

The news report in which Meralco cautioned the public of tightness in supply did not come as a surprise. Meralco, the country’s biggest power distributor, said power supply this summer would be tight but stopped short of saying there would be blackouts.

Company president Oscar Reyes said there would be tightness in supply, as several power plants will go on scheduled maintenance shutdowns.

He said Meralco is hoping that tightness in supply would not jack up prices as was the case in December 2013 and January 2014 when the Malampaya natural gas platform in offshore Palawan went on a 30-day maintenance shutdown from Nov. 11 to Dec. 10 last year.

Palace defends Petilla

President Aquino defended embattled Energy Secretary Petilla yesterday by saying that he was doing his best to address the country’s energy needs.

Sen. Sergio Osmeña III said he had asked Aquino to sack Petilla for focusing on politics and failing to solve the country’s energy problems.

Osmeña called Aquino hard-headed and an “awful manager” who could not fire his people.

Aside from the Mindanao power crisis, Petilla was also criticized for his handling of Meralco’s power rate hike as well as the re-electrification of areas devastated by Super Typhoon Yolanda last year and Typhoon Pablo in 2012.

Aquino said the public saw the effective actions of the agencies when disasters struck, like the DOE headed by Petilla.

Based on his assessment, Aquino said it would take six months to restore power in 320 areas hit by Yolanda but Petilla and the DOE did it in 40 days.

But despite trying to beat their self-imposed 40-day deadline, Aquino said there were those who asked Petilla to resign because he was late by several hours in some areas.

WESM rates

On the sidelines of the Philippine Economic Briefing yesterday, Petilla said that PEMC had already recomputed the WESM rates as ordered by the Energy Regulatory Commission (ERC).

“There is a rate in PEMC and the rate is a little over P6 per kwh, average price for both months,” Petilla told reporters.

PEMC, in its advisory issued yesterday, said the new WESM price for the November 2013 supply month is at an average rate of P6.007 per kwh while the price for the December 2013 supply month is P6.2 per kwh.

For Meralco alone, the new WESM rate is P7.219 per kwh, according to PEMC.

“PEMC will issue the WESM bills today using the regulated prices with the exception of Meralco’s November bill. Thereafter, we will file our report to the ERC,” said PEMC president Melinda Ocampo in the advisory.

According to ABS-CBNews.com, quoting PEMC data, the reduction in WESM charges to P6 per kwh should translate to a lower December 2013 generation charge of P2.43 per kwh from P4.15 per kwh and P3.02 per kwh for the January 2014 generation charge from P5.33 per kwh.

This would translate to a generation charge refund for customers of Meralco, at least on the January 2014 charges as the December 2013 rate is still the subject of a temporary restraining order (TRO) issued by the Supreme Court.

However, Meralco has yet to compute the impact of the re-computed rates.

A Meralco official said the power distributor has yet to receive a copy of PEMC’s new rates.

Petilla said the impact of the new recomputed WESM charges on Meralco’s billing to customers is expected to be felt in May, at the earliest.

“It will be part of the April cycle, to be billed in May,” Petilla said.

Meralco confirmed last week that there would be a reduction but said it has yet to compute how much the new rates would be.

In an order issued after months of investigation, the ERC said there was market failure at the WESM as it voided the prices in November 2013 and December 2013 supply months and ordered the PEMC to re-calculate the rates. – With Iris Gonzales, Aurea Calica