Industrial customers with at least 2.0 megawatt (MW) peak demand and efficient load factor would be offered up to P1.10 per kilowatt hour (kWh) reduction in their electricity consumption if the independent power producers of both Manila Electric Company (Meralco) and National Power Corporation (NPC) would be dispatched beyond their contract levels.
This was the premise laid down under the revised application filed by Meralco for its proposed "block power availability rider" hinging much of the power supply it could supply at a reduced rate if its contracted IPPs with First Gas Power Corporation would go beyond the minimum energy off-take of 83 to 86 percent of the plants installed capacities.
The power facilities of First Gas are the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo; of which generation output were reported to have been ramped up after the congestion in the transmission lines have finally been addressed.
While the original application of the utility was only limited to such arrangement, the Energy Regulatory Commission (ERC) in its decision last July 13 this year, rendered that the offer of such discounts should not just be limited to Meralco and its IPPs; but should also be extended on equal opportunity to other IPPs, primarily those under contract with National Power Corporation.
The Block Power Availability Rider has been orginally designed as transitory mechanism that will provide discounts on the power bills of Meralco’s large customers; until the ERC mandated its expanded coverage.
As planned, such transitory mechanism is proposed to be implemented from the time of its approval until the start of open access and retail competion, as envisioned to be coming as early as 2006.
It was emphasized that "the discount mechanism encourages customers to be more efficient in the use of electricity, thereby, optimizing the existing generating capacity and resulting in the reduction of the overall average system cost."
As laid down by the ERC, the grant of discounts shall be based on every customer’s load factor; with the most efficient given the first crack on the reduced electricity rates.
The block power availability rider scheme was set into fore in collaboration with the Department of Trade and Industry (DTI) and Department of Energy.
NPC, while initially manifesting that "it is remotely possible for it to provide further generation discounts," the company would be able to join later when the bottleneck in transmission line for targeted higher dispacth of its 1,200-megawatt Ilijan power plant would finally be resolved.
"The servicing of said new transmission line would enable NPC to run at full dispatch, the Ilijan power plant, its cheapest running power plant," the ERC has stated in its ruling. (MMV)
