Manila Electric Co., the biggest power retailer, said Monday it was open to a settlement agreement with Millennium Energy Inc., the operator of the 100-megawatt diesel-fired power plant in Navotas, but the electricity generator rejected the offer.
Meralco senior vice president and customer retail services, corporate marketing and communication head Al Panlilio said the company was merely applying the distribution rates to “similarly situated customers and generators.”
“It’s not exorbitant. What Millennium wants is for us to waive it… In fact, we have been discussing to work on a settlement but they just refuse to pay,” Panlilio said.
Millennium decided to stop supplying power capacity to the wholesale electricity spot market after incurring losses due to the wheeling charges collected by Meralco.
WESM acts as the trading floor of electricity and is being operated by Philippine Electricity Market Corp.
Energy Secretary Zenaida Monsada said while the distribution wheeling rate issue was the concern of the Energy Regulatory Commission, the Energy Department conceded that the diesel plant could add capacity to the grid during the dry months.
“If it can run again, it will help improve the supply situation,” Monsada said. Power supply is historically tight during the dry months when demand is high.
“We will coordinate with ERC about Millennium. The issue is compensation. We cannot force anybody if it is not properly compensated,” Monsada said.
ERC chairman Jose Vicente Salazar earlier said Millennium decided to rescind its contract with Meralco and notified PEMC that it would cease membership in WESM effective April 1.
“Millennium decided to rescind its contract [with Meralco]. It did not want to pay anymore saying that the contract was unreasonable,” Salazar said.
“Millennium is embedded to Meralco, so it is being charged the wheeling charges… This is one thing that is crucial with the agreement. Millennium will have to pay Meralco despite the fact that it is not earning from the market. It is like the highway that even if you don’t use it, you pay for it and it based on the capacity that you can actually offer to the market,” he said.
Sources said Millennium was required to pay Meralco P25 million a month under the wheeling agreement, on top of the transmission charges of National Transmission Corp.
Millennium also owns the 620-megawatt Limay power plant previously owned by San Miguel Corp.
