Meralco to sign power supply agreements

Business Mirror
MONDAY, 12 DECEMBER 2011 19:42 PAUL ANTHONY A. ISLA / REPORTER


POWER retailer Manila Electric Co. (Meralco) will sign supply agreements with a number of power generators to meet its growing requirements. 


In a disclosure to the Philippine Stock Exchange, Meralco said its board has allowed the company to enter into power agreements for distribution utility and local retail electricity supply (RES). 


The country’s largest power distributor said it will source requirements from South Premiere Power Corp., Masinloc Power Partners Co. Ltd. and Sem-Calaca Power Corp.


The Meralco board, according to the disclosure, has also approved the engagement of William Pamintuan as Deputy General Counsel and head of legal, the promotion of Nestor Sarmiento as Vice President and head of network asset management, and Melinda Derpo as Vice President and head of marketing, all effective on January 2, 2012. 


Manuel V. Pangilinan, Meralco president and chief executive, earlier said his company is looking at building a total of 1,500 megawatts ofpower generating capacity within the next five years. This, as it sets up the Meralco Power Generation Co. to undertake the power distributor’s plan to go into generation.


“We have a target generation cost that we want to achieve. And to achieve that target getting into power generation is the best. Not just on our standpoint, but also for consumers. We get beaten up whenever electricity charges go up,” the Meralco official said.


The power plant, said Pangilinan, will be put up on a phased development.


“Putting up our own power facilities would also allow us to bring down its rates and we may be looking also at traditional sources of power other than renewable energy sources for now, as there are very little available renewable energy sources. So we have to rely on the more traditional fuel sources, nuclear been mentioned before, coal and gas,” Pangilinan said.


In June, Meralco said it has sought the Energy Regulatory Commission’s (ERC) approval for its petition to be licensed as a Retail Electricity Supplier (RES). 


In its manifestation, Meralco said it will put up a local RES that will be operational at the commencement of Open Access and Retail Competition.


A RES license is issued to an entity authorized by the ERC to sell, broker, market or aggregate electricity to the “contestable” market, in which end-users will have a choice of a supplier of electricity. 


Oscar Reyes, Meralco Senior Executive Vice President and Chief Operating Officer, said they will set up a local RES to provide “contestable” customers the power of choice in electricity provider while continuing to experience the full services of Meralco. 


Under the Open Access system, “contestable” customers can choose their electricity service provider, while Meralco will continue to be the network and metering service provider.


Reyes said as a distribution utility Meralco values the relationship it has established with customers in the same way that they may value such. 


Given that, Reyes said Meralco feels that they owe it to the customers to continue offering the option for full service that they have already provided for years. 


Reyes added that with the power of choice that customers will be accorded with the commencement of the Open Access system. 


Reyes said he hopes their customers will consider Meralco as an option among other service providers. “We hope that our customers will continue to source their power needs from us, along with a range of other services that we provide,” Reyes said.


Reyes said Meralco will have a very competitive electricity supply portfolio sourced from existing generating plants and from new highly efficient baseload, mid-merit and peaking power plants Meralco’s power-generation arm is putting up to meet customer requirements.