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Myrna Velasco

ERC to extend deadline on supply talks

With some delays in implementation due to legal hurdles, the Energy Regulatory Commission (ERC) indicated that it is keen on extending the deadline for contestable customers to negotiate supply deals with retail electricity suppliers (RES). “We believe that an extension would afford concerned parties sufficient time to negotiate new supply contracts with retailers,” ERC Chairman Jose Vicente B. Salazar noted. ERC was confident that mandatory retail competition and open access (RCOA) at lowered threshold of 750 kilowatts will finally make its way into true-to-form implementation as initially targeted for next year. This was following the issuance of a temporary restraining order (TRO) by the Supreme Court effectively reversing for the meantime the injunction earlier rendered by a Pasig Regional Trial Court on a case filed by the Manila Electric Company (Meralco) stopping the …

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Utilities’ higher spot market exposure noted

With continuous downtrend in prices, power utilities have been manifesting increased exposure in the Wholesale Electricity Spot Market (WESM) when it comes to their power supply procurements. This was noted by Philippine Electricity Market Corporation (PEMC) President Melinda L. Ocampo, emphasizing that for the supply month of September, purchase from the spot market had been at a record high of more than 15 percent. “The September (2016) billing period showed a marked increase in the share of electricity bought in the spot market compared to the monthly average of 8 to 10 percent sourced by wholesale customers,” she said. Ocampo expounded that based on data, 15.09 percent of power supply had been bought from the spot market in that particular billing month; while 84.91 percent had been from bilateral power supply deals. She said …

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Shell shuns hedging as pricing strategy

To avoid decimated balance sheet that could trigger ‘unwanted shocks’ on the value of its market shares, Pilipinas Shell Petroleum Corporation (PSPC) indicated that it shuns hedging as a pricing strategy for its oil products. “We don’t believe in hedging. In the first place, no one knows where oil prices are going, so to hedge for the sake of hedging, to us that is not the right way,” outgoing PSPC Country Chairman Edgar O. Chua has noted. Fundamentally, hedging is a form of insurance or investment strategy intended to reduce the risk in price movements of certain assets or commodities. With the boom-and-bust cycle in oil markets, this instrument is often resorted to by some industry players. Some oil companies, even in the Philippine market, had turned to hedging as recourse especially when …

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SC restrains Pasig RTC over Meralco case

A temporary restraining order (TRO) issued by the Supreme Court will effectively prevent the Pasig Regional Trial Court Branch 157 for the meantime from enforcing its injunctive relief and in continuing with its proceedings on the case filed by Manila Electric Company (Meralco) questioning the Retail Electricity Supplier (RES) rules previously issued by the Energy Regulatory Commission and the corresponding policy issuances of the Department of Energy. The high court in its retraining order, has enjoined respondent Pasig RTC, its agents and “other person acting on their behalf from continuing the legal proceedings in Special Civil Action No, 4149-PSG and from enforcing all orders, resolutions and decisions rendered until the instant petition is finally resolved. The TRO was granted by Senior Associate Justice Antonio T. Carpio, chairperson of the high court’s second …

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AC Energy enlists as power retail supplier

AC Energy Holdings Inc. of the Ayala Group has secured its new license as retail electricity supplier (RES) in the mandatory competitive retail electricity market of the restructured power sector. AC Energy President and Chief Executive Officer Eric T. Francia said the target is to corner customers with at least 50 megawatts of aggregate capacity in the short term. “In the near term, 50Mw or less would be okay as a starting point. Near term would be three years,” he said. On the company’s RES enlistment, Francia noted “we have established our organization, we have the license already in preparation for this mandatory open access.” Retail competition and open access in the power industry would refer to that restructuring phase when contestable customers can already negotiate and sign contract for their own electricity needs …

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Ayala energy investments to double: P80 B

AC Energy Holdings, Inc., the energy development arm of Ayala Corporation, is concretizing greenfield project blueprints as well as mergers and acquisitions in its bid to double power investments to about P80 billion in the next five years, roughly P40-billion climb from currently committed capital outlay. In a lunch briefing with reporters, AC Energy President and Chief Executive Officer Eric Francia said that it will be aligned with their planned capacity build up of up to 2,000 megawatts (MW) until year 2020. The investment portfolio, he said, would still be a combination of loan and the company’s equity contribution on each project – but he has not provided specific details at this point. A Company statement has expounded that “Ayala has committed close to P40 billion of investments in AC Energy, and is …

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Gov’t urged to act on transmission issues

Power generation companies (GenCos) have been seeking immediate action from relevant government agencies to resolve planning and cost recovery mess on the implementation of vital transmission projects. They noted that one critical factor contributing to power plant project delays had been indecision and incoherent transmission development planning, thus, rendering the Filipino consumers collateral damage in the ensuing problems of extreme supply tightness and even blackouts. Senate Committee on Energy Chairman Sherwin T. Gatchalian noted that this will be among the focus of not just investigations, but of policy and regulatory reinforcements as well as planning strategy that they will sway with the Department of Energy (DOE), Energy Regulatory Commission (ERC); and the National Grid Corporation of the Philippines. “In our hearings, that problem of NGCP had been opened up that they’re just going …

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Power industry players frown at nuclear option

Department of Energy (DOE) is pushing the envelope when it comes to integrating nuclear into the country’s technology options in the shifting energy mix, but power industry players are giving it the cold shoulder. Even as debates on the proposed energy mix is intensifying, nuclear appeared to still be the elephant in the room for many of the deep-pocketed power investors in the country, unless policy and regulatory frameworks on this technology option are first rewired, rewritten and cast on clear directions. Aboitiz Power Corporation President Antonio R. Moraza simply noted that the DOE has “more important matters to focus on” especially when it comes to needed policy improvements in the sector. The company is not setting its sight on nuclear power given the other more pressing issues of the sector, primarily the …

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Shell gears up retail expansion to 1,200 stations

Pilipinas Shell Petroleum Corporation gears up for expansion of its retail portfolio to 1,200 stations in the next three years from currently at over 960 stations – that could also serve as ‘sweetener to shares value’ of their public and institutional investors. In a briefing with reporters, incoming Shell Philippines Country Chairman Cesar G. Romero said they shall pick up pace on annual capital spending of $10 million to $20 million for their retail network beefing up. He said 10-percent of P19.5 billion proceeds from their scheduled initial public offering (IPO) next month will be earmarked for their planned expansion ventures. “We will continue to invest in our marketing business…we are integrated business, so we are also looking for investments to ensure that our depots are enhanced and we continue to think about …

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PSALM will be ‘homeless’

Debt-laden Power Sector Assets and Liabilities Management Corporation (PSALM) will be “homeless” around Christmas time following the expiration of its lease with the building that had served as its home for the past 15 years. This dilemma of the company was already communicated to the Department of Energy (DOE) but there is no definite go-signal yet what will be the next steps on the search for their next office building – a sign that “Santa Claus” may not have been pleased with the company as it still struggles in managing its monstrous debts of P245 billion. PSALM executives noted that they are already in limbo at this time, since to secure an office, they should now start the bidding process for it – that alone will take time and may go beyond …

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