Meralco’s ILP gains 4 more players; committed load now at 224.22 MW

by Lenie Lectura, January 23, 2015
from BusinessMirror

THE Manila Electric Co. (Meralco) has signed up four more Interruptible Load Program (ILP) participants that have committed an interruptible load capacity of 6.3 megawatts (MW).

This brings to a total of 224.22- MW committed load from captive customers as of January 20.

Those that have recently signed up include Insular Life, BA Lepanto, Pacific Mall and Acacia Hotel.

Under the ILP, big power users will be asked to run their own generators when supply is short, instead of getting their power from the Luzon grid. They will be compensated for their fuel costs, the Department of Energy (DOE) assured.

The electricity that would not be taken from the grid would be available to households and other users, sparing them from rotating blackouts.

The ILP, however, is voluntary, but Meralco continues to encourage 21 more prospective ILP participants that could contribute a potential 40.63 MW more. The utility firm has yet to decide if it will extend the January 31 deadline within which interested ILP participants can sign up with the utility firm.

“We are still working to sign up participants by end of this month. We will still evaluate what to do afterward, but will certainly welcome additional customers into the program,” Meralco Utility Economics Head Lawrence Fernandez said in a text message on Friday.

The ILP is, so far, the best solution to address the imminent power crisis that could hit Luzon this summer.

Latest data from the DOE state that Luzon needs 782 MW, of which 135 MW are needed to meet the required regulating reserve, and 647 MW are needed to meet the required contingency reserve.

The Energy Regulatory Commission (ERC), meanwhile, is reviewing the ILP rules to be able to allow additional participants, such as contestable customers, to join the program and provide a transparent and reasonable recovery of cost.

“One of the solutions being suggested is to encourage participation of more customers under the ILP. Prospective customers may come from contestable customers that already have an existing contract with retail electricity suppliers and those directly connected customers of the National Grid Corp. of the Philippines,” the ERC said.

Contestable customers are those with monthly average peak demand of at least 1 MW. They are allowed to choose the supplier of their energy requirement under the Retail Competition and Open Access (RCOA) regime.

The suppliers whom the contestable customers will choose are called the Retail Electricity Supplier (RES). They will directly negotiate and contract on a wholesale level with power- generation companies so they can sell electricity to contestable customers at competitive rates.

These rates will be reflected in the generation-charge portion of the bill, which typically comprises a certain percentage of the monthly electrical bill.

When a contestable customer chooses an RES to supply his needs, this RES will also be in charge of the customer’s monthly billing and collection of payments. Prior to RCOA, these tasks of energy sourcing, supply, billing and payment collection were done by the local distribution utility, Meralco.

Meralco said it will still continue to distribute electricity to all contestable customers in its franchise area. The corresponding distribution charge due to Meralco for rendering this service will be reflected in the RES’s monthly bill.

Moreover, all power distribution-related concerns, like scheduled and unscheduled interruptions, new service applications for electricity, application for increased power requirements and energizing new facilities, will still be coursed by the contestable customers to Meralco.

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