Business Mirror
by Lenie Lectura - Oct 27, 2014
MANUEL V. Pangilinan, chairman of the Manila Electric Co. (Meralco), on Monday called on the government to expedite the tedious process of securing the necessary permits to build new power plants, saying this is what the government needs to focus on to partly solve the power crisis this country faces next year.
“We just need a more expeditious process of approving those power plants and an overall policy on which new plants. Is it coal? Gas? Or whatever that the government sees prudent for the country so that the private sector could be guided,” Pangilinan said.
One of the power plants that hit a snag is the 600-megawatt (MW) Subic power project of Redondo Peninsula Energy (RP Energy), a consortium composed of Meralco PowerGen Corp., Aboitiz Power Corp. and Taiwan Cogeneration International Corp.
The Subic project has been in the backburner since 2010, owing to a number of legal challenges hurled by those who are against coal-fired power plants.
Energy Secretary Carlos Jericho L. Petilla had proposed that lawmakers come up with a bill that will hasten the construction of power plants.
“This is to shorten some of the stumbling blocks in coming up with power plants. This is intended for energy projects. We want a bill that will fast-track the processing of permits and, if possible, no TRO [temporary restraining order] against these projects,” the energy chief said.
“Will we do away with permitting? No,” Petilla said. “We have a law right now that any government project of national interest cannot be subject to a TRO except for the SC. The problem is, we cannot invoke that for power plants. It’s only for government projects.”
“Maybe there could be someone who determines national interest. The President can sign. Malacañang can come in and sign,” said Petilla, adding that these power projects affect national interest. “This particular aspect of coming up with a power plant is very important.”
The Department of Energy (DOE) has been vocal in soliciting the help of the private sector to build more power plants to augment the lack of power supply.
But the private sector is asking the government to diligently do its part.
“At the end of the day, it is difficult to predict what will happen in respect to the summer of 2015. Clearly, reserves are thin and Meralco is taking steps to maximize what’s available from ILPs [Interruptible Load Program] but if there will be forced outages…. So, again, probably it’s up to Congress and the government to agree what form of assurance would be provided,” Pangilinan said.
The DOE said that the Luzon grid needs 700 MW of additional capacity next year.
Pangilinan said the long-term solution to solve the country’s power woes is to build more power plants.
“This will give us a more adequate supply of power and also puts a downward pressure on pricing, similar to the law of supply and demand,” he said.
Meralco President Oscar Reyes said the utility firm is prepared to deal with the power crisis.
It is banking on its ILP and power-supply contracts to cover for the demand in the summer months next year.
Meanwhile, the utility firm is looking at closing the year with a core net income of P17.8 billion after it booked over P14 billion in reported net income from January to September this year.
“We are guiding full-year profitability on a core basis of P17.8 billion in reference to the 2013 core of slightly above P17 billion, so that’s about a 4.6-percent growth in core income for 2014 versus 2013,” Pangilinan said at a news conference.
Pangilinan said Meralco’s growth in the future is anchored heavily on its core-distribution business, which has so far provided 90 percent of the utility firm’s bottom-line results.
“We will continue to focus on service delivery network reliability and accelerated energization of our growing number of customers.
These give us the basis for guiding Meralco’s consolidated core net income from the full-year 2014 to be in order of P17.8 billion,” Pangilinan said.
In 2013 Meralco’s core net earnings inched up by 4.7 percent to P17.02 billion. At end-September this year the utility firm posted a core net income of P14.3 billion, up 5 percent in the same period a year ago. Reported net income, meanwhile, went up by 5 percent to P14.3 billion.
Revenues, of which electricity sales accounted for 98 percent, decreased by over 2 percent to P202.9 billion.
Meralco customers grew to 5.5 million at end-September. In terms of energy-sales mix, commercial accounts for 39 percent of total sales, with residential and industrial at 30 percent and 31 percent, respectively.
The company has programmed a capital expenditure of P13.5 billion next year, up from P11.5 billion that was budgeted this year. source
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