Thursday, May 31, 2012

Ecozone Rates Have Gone Higher

.. MANILA, Philippines - The rate being billed to special economic zones (SEZs) have gone higher as it is reflecting the full impact of the P0.69 per kilowatt-hour (kWh) increase in the generation charge of state-run National Power Corporation (NPC). According to Manila Electric Company (Meralco), the rate being passed on to end-users in the ecozones now hovers at P5.29 per kilowatt-hour (kWh), which is already inching close to the power utility firm's blended rate of P5.59 per kWh, referencing on this year's May charges. The higher tariff for the ecozone locators is viewed to be casting away the government's intent to offer lower electricity rates to these customer segments. If compared to the tariffs in the power supply agreements (PSAs) recently sealed by Meralco with various power producers, company officials indicated that the ecozone rate will be comparatively higher if the government will not decide to revert it to the pre-NPC adjustment level. There is a pending plea with the NPC or its successor-company Power Sector Assets and Liabilities Management Company (PSALM) to consider scaling it back to P4.60 per kWh, which was the level when the Ecozone Rate Program was extended in December last year. The assignee-supply contract for the ecozone tariff had been for the output of the Ilijan natural gas plant which is under the charge of South Premiere Power Corporation, a subsidiary of San Miguel Energy Corporation and independent power producer administrator (IPPA) of the facility. Meralco president and chief executive officer Oscar S. Reyes said they will study first if there is a possibility to replace their ecozone-covered transition supply contract with their new PSAs "assuming the ecozone program will not be renewed when it expires December this year." The other condition for the lapse of the ERP would be the introduction of retail competition and open access (RCOA) which is being targeted by the Department of Energy (DOE) around October 26 this year. The expiration of Meralco's ecozone offer of preferential tariff will also coincide with the due date of its TSCs with NPC-PSALM, some of which have been assigned to IPPs when the assets were privatized. In preparation for that eventuality, Meralco already signed up supply contracts with the IPPs to cover its requirements. These include the deals with South Premiere for Ilijan capacity; AES Corporation for its Masinloc plant; and Sem-Calaca Power for its Batangas coal plant. The power deals' duration will be for seven years and their tariffs are expected to be lower than what Meralco is currently charging. The PSAs are pending for approval by the Energy Regulatory Commission. (MMV) ..