The incoming administration’s target to lower power rates is doable but this involves multiple factors including “sound government policies,” according to the Manila Electric Co. (Meralco).
“Reducing electricity prices is always possible but involves looking into many factors that affect the movement of electricity rates. The biggest and most volatile part of the bill which is the generation charge is driven by fuel prices, forex and demand-supply situation,” Ray Espinosa, Meralco president and chief executive officer, said during a virtual stockholders’ meeting yesterday.
“Fuel prices as we know mostly reflect the global oil prices as even our own Malampaya natural gas is indexed to oil.What we need are sound government policies that can address the movement of fuel prices and forex and an environment that encourages the development and investment of additional capacities brought about by new generating plants,” Espinosa added.
Meralco also said it will “favorably consider” contracting reasonably and competitively priced supply from generation companies, including nuclear power plants if these become operational in the country.
Espinosa cited the Department of Energy’s (DOE) projection that an additional 800 megawatts of power capacity annually is needed in the Luzon Grid from 2022 up to 2026, based on the 2020 to 2040 Philippine Energy Plan.
“With the recent surges in energy prices, the diversity of fuel sources is important for both energy security and affordability,” he explained.
Based on DOE data, as of end-2021, the country’s total installed on-grid capacity was at 26,882 MW while the total installed off-grid power capacity stood at 636.24 MW.
