04 Nov 2011
The Power Sector Assets and Liabilities Management (PSALM) Corporation clarified that the power rates for economic zones is not a matter that only PSALM can undertake. It is a product of a contractual agreement between the power customer, in this case the economic zones, and the power supplier. After the privatization of most Luzon plants previously owned by the National Power Corporation (NPC), PSALM ceased to become the sole supplier of electricity from which the ecozones may procure energy.
PSALM made the clarification in light of the request of the Manila Electric Co. (Meralco), the Philippine Economic Zone Authority (PEZA), and the members of the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) to retain the power rate discount inside the economic zones. Meralco, PEZA, and SEIPI sent separate letters to NPC asking the state-owned company to extend the lower rates until December 2012.
According to PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr., the ecozone rates are a component of the power supply contract between PSALM and Meralco, which will expire on 25 December 2011. Upon expiration of the contract, Meralco will be free to contract with other power generation companies.
"Although we fully understand the possible implications of this decision to the economy, it is no longer reasonable for us to renew the power supply contract with Meralco given the limited supply that PSALM currently has and the high operating costs of generating power from the remaining PSALM-owned plants in Luzon," Ledesma said.
"Upon expiration of the Meralco power supply contract, the customer is free to contract and negotiate with any power producer. As with any power supply contract, the power rate will depend on the contractual agreement between the parties," Ledesma concluded.
Strategic Communications and Partnership Division |