Meralco defends wheeling charges

by Alena Mae S. Flores –  May 12, 2016 at 11:35 pm

from Manila Standard Today

Manila Electric Co. on Thursday said it implemented the distribution wheeling charges approved by the Energy Regulatory Commission as provided in the contract signed with Millenium Energy Inc., operator of the 100-megawatt Navotas gas turbine power plant.

“The distribution wheeling charges billed by Meralco to MEI have been agreed to by both parties and approved by the regulators, so I do not see any reason why they would suddenly stop paying. There is clearly no—ispute to speak of in this case, only a refusal to pay rightful charges,” Meralco public information head Joe Zaldarriaga said when sought for comment.

Zaldarriaga said Millenium’s petition to waive the unpaid bills from Meralco covered charges for distribution wheeling, or for its use of Meralco’s distribution grid as an embedded generator. Millennium has unpaid billings of P34.501 million to Meralco.

“Waiving the payment of distribution wheeling service charges would be tantamount to letting MEI use the distribution grid of Meralco for free. Should this be the case, it would mean that the said charges, which are rightfully the responsibility of MEI, may  have to be borne by  electricity customers,” said Zaldarriaga.

“By seeking for a reprieve from the payment of DWS charges, MEI is not honoring the sanctity of its contract with Meralco, which it freely entered into in the first place,” he said.

“Should Meralco waive MEI’s payment for DWS charges, this will serve as precedent, and others will start asking for a reprieve from paying DWS charges as  well. Costs incurred by a distribution utility to serve MEI or other embedded generators would then have to be recovered from customers in the form of a cross-subsidy,” he said.

A distribution wheeling charge as defined by Republic Act 9136 is “the cost or charge regulated by the ERC for the use of a distribution system and/or the availment of related services.”

“We feel it is unfair to raise this issue against us considering that we did not commit any breach of our agreement with MEI. Likewise, the termination of the distribution wheeling service agreement and MEI’s de-registration with PEMC [Philippine Electricity Market Corp.] are acts purely attributable to MEI’s own making,” Zaldarriaga said.

He said Meralco complied with all its obligations under the distribution wheeling charges with Millennium, and was only acting in compliance with the parameters agreed to by both parties and as approved by the ERC.