Meralco urges shutdown of some Napocor plants

The Manila Electric Co. (Manila) is urging the National Power Corp. (Napocor) to shut down some of its plants while the state-owned power firm awaits to be privatized. The privatization of Napocor has been delayed for two to three years.

"In a Senate hearing, we came to know from Napocor that the plan on privatization will possibly take two to three years down the road," Meralco treasurer Rafael Andrada said, in a forum over the weekend.

Andrada hinted that the delay might give same leeway for Meralco to use its own independent power producers (IPPs) and, thus, bring down the electricity rates of its customers.

"Included in the EPIRA (Electric Power Industry Reform Act or Republic Act 9136) is the proposed privatization of Napocor. If this happens, the corporation can still preserve its plants, and include these in the privatization," he said.

According to Andrada, "there is the possibility of shutting those plants, or preserve them, then, hopefully, during the privatization these could be recooked."

But Napocor officials said the proposed shutting down is not feasible. "Shutting down some of our plants which are basically baseload plants is not an option," the sources said.

The Napocor sources said "we cannot shut down a baseload plant because it is important for system reliability. Baseload plants, they said, are always running plants and a major source of power in the Luzon grid.

According to the Napocor officials, most of the Napocor-run power plants are those that promote use of renewable sources of energy like hydro and geothermal power plants.

The Meralco official also said the Napocor should review its dispatch priority scheme to be able to reduce the electricity rates. "There are IPPs that are not costly. But for one reason or another, they are not in operation. Perhaps, we should take a look if Napocor is giving priority to the IPPs," he said.

Andrada said Napocor should also shut down temporarily its plants to bring down the oversupply and reduce the purchased power adjustment (PPA).Meralco, which is 16 percent owned by the Lopezes and 24 percent government (the remaining shares are owned by various stockholders including the public), claimed that they buy power from Napocor at higher price or at P4.20 per kilowatthour (kWh).

He said Meralco’s IPPs sell only at P3.80 per kWh (Quezon Power) and P3.40 per kWh (First Gas Power Corp.) – Donnabelle Gatdula