Meralco seeks ERC nod for power supply deals

MANILA Electric Co. (Meralco) is seeking the approval of the Energy Regulatory Commission ( ERC) for the power-supply agreements (PSAs) it signed with San Miguel Energy Corp. (SMEC), First Gen Hydro Power Corp. ( FGHPC), South Premiere Power Corp. (SPPC) and Phinma Energy Corp. in September.

Meralco and these generation companies ( gencos) jointly submitted their applications covering a supply of 1,700 megawatts ( MW).

On September 13, Meralco signed accords for 500-MW midmerit capacity. SPPC shall deliver 290 MW of electricity, while Phinma Energy, 110 MW, and First Gen Hydro Power, 100 MW.

The power distributor sealed the deal for 1,200 MW of baseload capacity on September 17. Under the deal, Phinma Energy shall provide 200 MW of electricity and SMEC, 300 MW, while SPPC, 670 MW.

Meralco said it had to source additional power supply through bilateral supply contracts to ensure continuous and reliable electricity for its customers.

“Based on the power situation outlook for 2020 and succeeding years, Meralco foresees a capacity

expiration by Dec. 25, 2019, of its power supply agreements covering 1,905 MW,” its application reads.

The ERC said it would ensure that distribution utilities (DUs) that signed PSAs with a generation company opted for the lowest cost offer during the competitive selection process (CSP).

“At the moment, we cannot as

the proposed rate in the Meralco PSA adverted to was indeed the least cost. But once the subject Meralco PSA application has

a thorough evaluation to ensure [ that] the proposed rate in the PSA is the least cost,” ERC Chair

Devanadera said.

“We will require the submission of pertinent documents from the distribution utilities that will show proof that the CSP [that they] have undertaken in securing their power supply from the generation companies adhered to the ‘least cost’ principle,” Devanadera added.

The CSP primarily aims to ensure a fair, reasonable and cost effective generation charge for consumers, under a transparent bidding between gencos and DUs.

Early this year, the Supreme Court ruled that all PSA applications submitted to the regulatory agency on or after June 30, 2015 must undergo a competitive bidding.

Meralco previously conducted three public biddings for the procurement of power supply of which only one of the three CSPs conducted failed.

Meralco shares ended flat P346 apiece on Wednesday. at