FIRING LINE By Robert B. Roque, Jr.

Savings for power consumers

The memories of the past summer months are still bright and fresh. The multiple yellow and red alerts we experienced during that period were an eye-opener for Filipino consumers, showing us that we desperately need more power supply and additional capacity to add to the grid.

Well, it seems that the government and the private sector responded quickly.

I saw on the news that Meralco held recently the successful power supply agreement (PSA) signing for contracts to supply Meralco 500 MW of mid-merit capacity effective December 26 for a five-year term.

The contracts will be subject to regulatory proceedings and evaluation by the Energy Regulatory Commission (ERC), ensuring that everything is above board.

I guess Leftist Consumer groups can now withhold their attacks on the PSAs and appreciate the fact that the competitive selection process (CSP) is pro-consumer.

The bidding was done following the Department of Energy (DoE) Circular requiring Distribution Utilities to procure power through CSPm which was administered by the Third-Party Bids and Awards Committee.

This is all good, but this takes the cake: Additional savings to consumers.

With these PSAs we can look forward to lower rates. This will result in additional savings and, ultimately, the least cost.

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During the agreement signing for 1,200 MW of baseload capacity last September 13, San Miguel Corporation President Ramon Ang said: “Actually we were hesitant to join the bidding. walang fuel pass-on, talagang grabe ang risk. Pero I know (Meralco President and CEO Atty. Ray Espinosa) was trying to protect the consumer.”

Phima Energy President Eric Francia added relief: “The most important thing is that the consumers are benefitting. So kami nang bahala to manage that risk. It’s not easy but hopefully this sets the new normal. I’m hopeful that the rest of the sector will follow and really deliver very positive benefits to the Filipino consumer.” 

Espinosa emphasized that “The contracts’ all-in rate already includes line rental and VAT and the cost of replacement power for all plant outages. The generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers.”

This seems good news to consumers and the power industry.

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