[Vantage Point] Does Meralco favor imported LNG?

The Philippines cannot completely take off economically due to the instability of the country’s power supply — and the unreasonable electricity costs

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Most analysts that Vantage Point has spoken to blame power supply issues, which could possibly throw a monkey wrench into the economy from fully blossoming. The Institute for Climate and Sustainable Cities believes that the threat of power supply deficiency has always been a major concern during the dry season when the El Niño weather phenomenon triggers higher-than-usual temperatures. ICSC says this weather disturbance negatively affects hydropower capacity across the country.

The recent red and yellow alerts which signify power supply shortages have impelled Meralco to procure up to 3,000MW of additional electricity. Critics say that by the very nature of its business, Meralco is required to buy power through the competitive selection process with the end view of getting the lowest costs. At least 2,400 MW out of 3,000 MW went to power plants that run on natural gas, but the caveat, critics argue, is that the winning bidders operate on imported, instead of local LNG.

More troubling, according to critics, is the attempt by some vested interests to paint local gas as the more expensive type of fuel, which to them, is an outright falsehood. They cite reports showing that a significant portion of the awarded power contracts were granted to plants running on imported LNG rather than those tapping into the local indigenous gas reserves of the Malampaya field.

• It is a baseless accusation that stem from the interest of those who favor certain generation facilities to continue getting long-term contracts. • Another point worth emphasizing is that, for the Santa Rita plant, which is still contracted with Meralco, the Malampaya owners raised its gas price by around 10% when they renewed the Gas Sale and Purchase Agreement in January 2024. This increase in the cost of the indigenous fuel is currently being reviewed by the Energy Regulatory commission .

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