Meralco execs draw wish list for next administration

by Lenie Lectura – January 10, 2016

from Business Mirror

TOP officials of the Manila Electric Co. (Meralco) have drawn up their wish list for the country’s next president.

Meralco Chairman Manuel V. Pangilinan, in an earlier interview, said allowing the private sector to invest in critical infrastructure is something that the government should observe amid robust economic growth.

The group of Pangilinan, as well as those of other conglomerates, like the San Miguel Corp. and the SM group, experienced delays in the current administration’s approval of project implementation processes.

The six-year term of President Aquino ends in June, with only a few months left before the national elections held in May.

“To be fair, there are no schools for presidents. Quite likely, new presidents are new presidents and they haven’t been there before, unlike prime ministers,” Pangilinan commented.

The businessman was asked what his aspirations are for the country, with a new president to be proclaimed in the next few months. “We always batted for more power plants because we create pricing pressure,” Pangilinan replied.

Meralco, the country’s largest electricity distribution-utility company, is also involved in the power-generation business through the Meralco PowerGen Corp. (MGen). Together with partners, MGen is gearing up to achieve a target of providing 3,000 megawatts (MW) of power-generating capacity in Luzon.

He pointed out that it is better for the country to have “more supply than less.”

“If the power plants are new then they are more efficient and better for the country. You could then retire old, creaky, expensive coal-fired plants. We should do just that. Allow the private sector to invest. It’s their money, it’s their risk. There’s no government funding involved, there’s no guarantees involved. So let them, subject of course to environmental constraint and proper permitting,” Pangilinan lamented.

The MGen-led consortium’s 600-MW power plant, for instance, has been delayed since 2010 owing to legal hurdles.

Pangilinan could not stress enough the importance of power-related infrastructure in the country. Electricity, he said, is similar to water, toll roads and other critical infrastructure which are “vital to everybody’s welfare.”

Meralco President Oscar S. Reyes, for his part, said industry stakeholders should support one another in order to achieve the following: an adequate supply of generation capacity, an interconnected transmission system and a reliable distribution network.

“The whole industry must work together. Generation, transmission and distribution must work together under the oversight of the leaders of the ERC [Energy Regulatory Commission] and the DOE [Department of Energy],” Reyes said.

Pangilinan said it is difficult to enumerate the critical policies that the government must give focus on, saying “it’s a broad range.”

Nonetheless, Energy Secretary Zenaida Y. Monsada assured the private sector that the policies crafted by the agency are meant to ensure a level playing field among industry stakeholders. “It has been the goal of the DOE to create a healthy environment, to foster competition that will benefit the consumers. We are also looking after the welfare of the consumers,” she said when sought for comment.

ERC Chairman Jose Vicente Salazar, meanwhile, said the agency has “detached itself from politics” in order to arrive at a reasonable decision with an end view of looking out for the consumer’s welfare.

“The law has made us independent. We have laid down the necessary resolutions. We have insulated ourselves from politics. Rest assured that we will decide on the cases fairly,” Salazar said in a text message.

Reyes stressed the importance of a harmonized power generation, transmission and distribution network. “You have to look at the whole industry. We must try to provide that much support to the generation sector, particularly in terms of addressing shall we say what is the most critical. No. 1 is transmission,” Reyes said.

The transmission facilities are vital to the power sector. Without these, the power produced by the generation firms could not be transported to the DUs, which, in turn, is responsible for distributing power to end-consumers.

The National Grid Corp. of the Philippines (NGCP) operates the country’s transmission network. Recently, the grid operator has been reporting of right-of-way (ROW) violations that have resulted in interrupted transmission services.

“ROW violations, along with bombing attacks, have become the significant problems for NGCP. It will be very difficult for us to deliver the available power supply to distribution utilities if we continue to encounter these
problems,” the NGCP said when sought for comment.

The NGCP legally holds the ROW in the areas near and around the transmission towers and posts. The assets, however, are still government-owned.

A coal power project in Subic by a consortium headed by MGen has encountered ROW problems that led to a delay in the project’s timeline.

But the delays and other problems encountered by Meralco do not hinder the utility company from further investing in the country. “These problems are all part of a fulfilling life. That’s why it’s more fun,” Pangilinan said.