First of two parts

AS chairman of the Energy Regulatory Commission (ERC), Monalisa Dimalanta has earned generally high marks from the power industry and consumers alike — not an easy task when trying to balance interests that, more often than not, are diametrically opposed to one another.

Last week, she sat with The Manila Times for an exclusive, one-on-one interview, sharing insights into some of the hot-button issues affecting the country's energy sector and providing a glimpse of what lies ahead for her agency, the industry and consumers.

Meralco rates not set in stone

In early January, Meralco, the nation's largest distribution utility, completed the first and largest of several power supply deals, securing 1,800 megawatts (MW) of supply for 15 years from San Miguel's Mariveles Power Generation Corp. (MPGC) and Excellent Energy Resources Inc. (EERI), and Aboitiz Power's GNPower Dinginin Ltd. Co. (GNPD) at rates of P6.9971 per kilowatt-hour (kWh), P7.1094/kWh, and P6.8580/kWh, respectively.

The deal raised some eyebrows, partly because the indicated rates are about P2/kWh higher than historical data from the wholesale spot market and other power supply agreements suggest they should be, and a statement variously attributed to San Miguel Global Power, Meralco, or both that the slightly higher rates would help to ensure investment in needed new generation capacity.

While those rates may indeed be eventually reflected on Meralco customers' bills, Dimalanta said the ERC is only just beginning its review, having had to wait for the required documentation to be submitted by the parties involved. Preparing the applications for rate approval is a complicated process and must be done jointly by the supplier and distributor, so the delay is not unusual.

Dimalanta did not venture a guess as to when ERC's rate decision might be made but credited Meralco for submitting a detailed application that clearly explains each of its calculations.

"That makes our job to review everything step-by-step quite a bit easier," she said.

NGCP in focus

The ERC is also conducting an extensive rate rebasing review for the National Grid Corp. of the Philippines (NGCP), the sole operator of the country's transmission grid. It is a complicated and somewhat contentious exercise that was several years overdue when Dimalanta took office, particularly since the NGCP has come under fire recently due to recurring extensive power outages on Panay Island, the worst of which occurred on Jan. 2.

Although NGCP was immediately blamed for the incident, the ERC has taken a more objective approach, launching an inquiry. Dimalanta said the initial investigation has been inconclusive, needing more data from both NGCP and the involved generation firms. The ERC has now moved to compel the production of these documents, and the hearing will continue until everyone has had the opportunity to offer their version of events.

Dimalanta credited NGCP with implementing some substantial improvements since the January blackout, noting that in a more recent sudden shortage of power, it was able to minimize the disruption by load-dropping.

Two days after Dimalanta made that observation, however, another outage occurred, this time due to the unplanned shutdown of the remaining two of three units of Panay's largest power plant.

Although the sudden supply loss was even larger than on Jan. 2, an island-wide blackout was prevented, and power was restored in areas that were affected within a few hours.

To be continued