13 self-generating firms switch to Meralco

Manila Electric Co. (Meralco) has successfully wooed at least 13 self-generating firms to source their combined 53-megawat (MW) power requirements from the Lopez-controlled power utility company.

In a report to the Philippine Stock Exchange (PSE), Meralco said these companies have availed of the company’s Customer Choice Program (CCP) which offers relatively lower rates. 

“This transfer of loads was motivated by relatively lower rates under the Customer Choice Program,” Meralco said. 

Among the firms that availed of the CCP are: Indophil, Mariwasa, Solid Cement, URC (Robitex), URC (CFC), Samsung, Goodyear, Air Liquid, Creative Diecast, Ibiden, Hoya, GNF and Hitachi.

Under the CCP, Meralco customers with at least one MW consumption are allowed a choice between Napocor’s time-of-use (TOU) rates or Meralco’s blended generation rate.

The CCP is expected to reduce the cost of electricity to large users, industrial and commercial customers by making available Napocor’s lower TOU rates. The program will help electricity users manage their consumption by shifting energy use from peak to off-peak hours. Electricity prices are lowest during off-peak hours — 10 p.m. to 7 a.m., and highest during Peak hours from 10 a.m. to 4 p.m. and 6 p.m. to 9 p.m.

Napocor’s TOU rate for Luzon is about P3.89 per kilowatt-hour while Meralco’s average generation charge for industrial customers from January to September is at P4.08 per kilowatt-hour. These rates are exclusive of distribution, transmission and system loss charges as well as taxes and subsidies. 

“We are slowly convincing them to go back to the grid. If many industrial users will get their power from the grid, it may lead to a power rate reduction,” Jesus Francisco, Meralco president said ealier.

He said one of the reasons why system losses in other countries are lower is because the share of industrial sector to electricity consumption is much higher.

For instance, the share of Meralco’s industrial customers in the electricity consumption is only 28.2 percent compared to Korea’s 52.9 percent, Taiwan’s 50.9 percent, Malaysia’s 45.4 percent and Thailand’s 48.8 percent.

Meralco aims to lower its system loss to nine percent, which is below the 9.5-percent cap set by the Energy Regulatory Commission (ERC). At present, Meralco’s system loss level is at 9.65 percent.

Francisco recalled that in the past, a lot of companies were connected to the grid but decided to self-generate due to the inefficiency of power supply.

 “In 1970s,  industrial users stood at 38 percent. Now, it has dropped to about 29 percent,” he said.

 “In 1993, we have a lot of brownouts, after that a lot of industrial consumers in our franchise bought generators. Today, we’re encouraging those self-generating firms to go back to the grid because the grid rates now are much attractive than self generation.”