Power retailer Manila Electric Co. called for a review of the pricing mechanism of the Malampaya gas-to-power project in northwest Palawan to reduce foreign exchange exposure and oil price volatilities.
“In the ongoing discussions regarding Malampaya supply, we respectfully recommend that pricing be reviewed to reduce exposure to foreign exchange and world oil prices, so that the country may more fully benefit from the indigenous nature of the fuel,” Meralco head of utility economics Lawrence Fernandez said a Senate hearing on the Malampaya gas project Tuesday.
Fernandez said Meralco recognizes the strategic value of an indigenous source of energy like the Malampaya natural gas. “Meralco, along with NPC [National Power Corp.] in the 1990s provided the guaranteed or take-or-pay market for the gas-to-power projects that underpinned the Malampaya project,” he said.
Fernandez said while natural gas from Malampaya accounted for around 29 percent of power generation in Luzon, it represented about 50 percent of Meralco’s supply to its captive market.