Probe sought on Meralco’s costly purchase of power

By: Julie M. Aurelio 05:05 AM November 22, 2020
https://business.inquirer.net/312308/probe-sought-on-meralcos-costly-purchase-of-power

Militant lawmakers want the House of Representatives to investigate the Manila Electric Company’s (Meralco) alleged purchase of costly power from a coal-fired power plant in Mauban, Quezon.

Bayan Muna Representatives Carlos Zarate, Ferdinand Gaite and Eufemia Cullamat filed House Resolution No. 1350 to probe the high generation rates imposed by the Quezon Power Philippines Ltd. (QPPL)

“Based on an analysis of Meralco generation purchases for 2019, QPPL has been perennially the most expensive coal power in the country since 2000 with rates 9 to 12 percent higher than the other coal plants. However, in 2020, Meralco paid QPPL 51 to 82 percent higher than other coal plants,” the resolution said.

The lawmakers want the House energy committee “to investigate, in aid of legislation, Meralco on its alleged payment of overpriced generation rates” to QPPL.

In their resolution, the solons noted that Meralco’s generation charge went down from P4.9039 per kilowatt hour (kWh) in January 2020 to P4.1241 in August 2020.

The 16-percent reduction was attributed to Meralco’s negotiation with independent power producers to “declare a situation of force majeure during the COVID-19 pandemic,” in which the take or pay provisions of the contracts were not applied. This saved for the consumers around P1.5 billion.

The measure cited analysis from Bayan Muna and Matuwid na Singil sa Kuryente Consumers Alliance that the price of coal used by coal-fired plants went down by 28 percent from $69.66 in January to $50.34 in August, and that the Wholesale Electricity Spot Market price fell by 193 percent from P8.49 per kWh in January to only P2.421 per kWh in August.

“From January to September 2020, Meralco allegedly bought 1.601 billion kWh of electricity from QPPL at an average price of P6.73 per kWh, while the average price of all other coal power suppliers to Meralco for that period is about P4.20 per kwh,” they said.

They said this was 51 percent higher than AC Energy’s P4.55, 66 percent higher than San Miguel’s Sual Power Plant’s P4.051, 82 percent higher than Therma Power in Pagbilao’s P3.6549 per kWh, and 66 percent higher than the rates of the new 460 megawatt San Buenaventura coal plant at P4.0533 per kWh.

“Last January 2020, the QPPL rates went up from P6.5919 per kWh to P6.723 per kWh despite coal prices coming down by 28 percent during that period. Moreover, last March 2020, Meralco allegedly paid QPPL at a rate of P28 kWh, which was passed on to consumers,” the measure said.