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Saturday, April 13, 2024

Meralco asks ERC to allow recovery of LNG fuel costs

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Power retailer Manila Electric Co. (Meralco) asked the Energy Regulatory Commission (ERC) to act on its joint pleading with First Gen Corp. to allow the recovery of imported liquefied natural gas (LNG) costs as it will have an impact on electricity rates and power supply.

Meralco senior vice president and head of regulatory management Jose Ronald Valles said they sought guidance from the ERC to approve First Gen’s LNG pass-on cost after it went through the validation process.

First Gen informed Meralco that if it could not commit payment of the full LNG costs, it could not place order for fuel from its supplier.

He said that as a consequence, First Gen would have to utilize liquid fuel or in the worst case, implement a plant shutdown, resulting to in a loss of 1,500 megawatts from the grid during the critical dry months.

“Shutdown has never been our option. It is always the last resort. Shutting down the First Gas plants, that’s not an option…We have proven time and again that it’s economically more expensive to the consumers if there is no electricity,” Valles said.

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Valles expressed hope the ERC would respond soon as it takes time for First Gen to order LNG.

“If it cannot -order within that period, we do not have a choice but use liquid fuel…LNG is cheaper than liquid fuel,” he said.

Meanwhile, Valles said Meralco would implement a refund of P0.04 to P0.05 per kilowatt-hour due to the increase in the gas sale and purchase agreement as directed by the ERC.

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