by Myrna Velasco November 1,
2015
Fleshing out the tricky provisions
of the competitive selection process (CSP) on power supply agreements of the
distribution utilities (DUs) is a continuing duel in the power industry, and
Manila Electric Company (Meralco) Chairman Manuel V. Pangilinan (MVP) had just
been among the last one to brand it as “seductively simple, but illogical”
policy frame.
“It is seductively simple, but it is
illogical if you think about it … it is illogical because you have shifted the
power to price over to the generation companies,” Pangilinan has told
reporters.
The mess on power pricing, he said,
can be best referenced to the November-December 2013 chaotic incident in the
restructured electricity sector when electricity rates spiked by P4.50 to P5.00
per kilowatt hour.
“I think the ability to price shall
be with the DUs because they had the last mile to the customers and we are
under obligation to obtain the ‘least cost’ power to our customers,” Pangilinan
stressed.
With generation cost component in
the electric bills of pass-through nature, the Meralco chairman has explained
that “we don’t make money on it but that (least cost power) is a fiduciary
obligation to our customers … so that’s why market power shall reside with the
DU.”
Pangilinan added “we are obligated
by law (Electric Power Industry Reform Act) for us to source the least cost,
and the ones generating the power are not under that obligation.”
Any abrupt decision on mandatory
implementation of the CSP is anticipated to be challenged legally by some
affected stakeholders.
When asked on this as an option, Pangilinan
said “it is something we don’t like to use but I hope people will see through
whether CSP makes sense or not. We don’t think it is promoting consumer welfare
– period!.”
The Department of Energy and Energy
Regulatory Commission have just decided last week to defer the issuance of the
final implementing guidelines of the CSP – pending some matters that they have
yet to harmonize on the questions raised against the policy.
ERC chairman Jose Vicente B. Salazar
announced that a meeting has been requested by Energy Secretary Zenaida Y.
Monsada this Wednesday (November 4) so they can discuss details that the two
agencies cannot seem to agree on yet.
CSP Circular author and former
Energy Secretary Carlos Jericho L. Petilla has previously admitted that this policy
is actually his way of directly assaulting Meralco’s lingering dominance in the
power industry.
Intentionally or not though, the entire power
industry is being held hostage by some provisions of the policy if the ERC-DOE
tandem would not be able to resolve them judiciously.
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