Meralco warns of more power outages in the future

Iris Gonzales | The Philippine Star | May 6, 2019

MANILA, Philippines — Manila Electric Co. (Meralco) warns of more power outages in the future given rising demand.

Metro Pacific Investments Corp. (MPIC), the parent firm of Meralco, said the delays in the approval of the company’s pending power supply agreements would also further delay the construction of the power plants.

“The longer you delay the PSAs, the longer the start of construction (of the plants),” MPIC president and CEO Jose Ma. K. Lim said in a recent briefing.

Meralco’s power supply agreements with seven power generation companies have been pending with the Energy Regulatory Commission (ERC) since 2016.

The agreements cover 3,551 megawatts or 90 percent of Meralco’s power supply requirements.

The power generation firms are Redondo Peninsula Energy Inc., St. Raphael Power Generation Corp., Atimonan One Energy Inc., MGen Panay Energy Development Corp., Global Luzon Energy Development Corp., Central Luzon Premiere Power Corp., and Mariveles Power Generation Corp.

Meralco chairman Manuel V. Pangilinan said it takes two to three years to build a plant, which means the power supply situation would remain precarious unless new power plants are built.

A cause oriented group has asked the Supreme Court to stop the ERC from approving the PSAs entered into by Meralco with the power generation firms as these 20-year agreements allegedly did not undergo a competitive bidding process.

“There is no reportable progress on the numerous PSA still with ERC for approval. We are increasingly concerned about the risk of power outages in the future given the continuing increase in power demand as our economy grows,” MPIC said in a statement.

However, Lim said the present power supply crunch is not about the delays in the actions on the PSAs but on the unscheduled shutdowns of some power plants.

Over the past weeks, the Luzon grid has been placed on red alert because of the precarious power supply.

Moving forward, Lim said Meralco continues to work on its strategy of building a diversified power generation portfolio of high efficiency, low emission coal fired plants and renewable energy sources.

The power distributor has spent P4.4 billion on capital expenditures in the first quarter to address critical loading of existing facilities and to support growth in demand and customer expectations.

Meralco’s core net income in the first quarter grew 14 percent to P5.6 billion, driven by a two percent increase in energy sales on slightly lower tariffs, lower interest expenses and higher yield from cash placements.
Source: https://www.philstar.com/business/2019/05/06/1915280/meralco-warns-more-power-outages-future