ERC to‘wait and see’on LNG deal

THE Energy Regulatory Commission (ERC) said on Friday it will take a “wait-and-see” approach for now on the planned liquefied natural gas (LNG) deal between The Manila Electric Co. (Meralco), Aboitiz Power Corp., and San Miguel Corp. (SMC).

ERC Chairman and CEO Monalisa Dimalanta explained the commission’s stand, even as a consumer group said it will study the possibility of opposing the deal once it reaches the commission.

“(With regards to claims on energy security), perhaps we have yet to see how that is realized … which I would think will mean new (energy) capacity additions or new generation plants that they will build,” Dimalanta said.

Dimalanta said the ERC review will focus on the Power Supply Agreements (PSAs) from the recently concluded competitive selection processes (CSPs) by Meralco.

“We understand that the deal appears to involve (based on statements by the parties) a buy-in by Meralco subsidiary MGen and Aboitiz Power Corporation into the existing plants fully owned by SMC and which were awarded PSAs by Meralco,” she said.

The energy watchdog group Power for People Coalition (P4P) said it would challenge the joint venture of Meralco and Aboitiz Power Corp. in two LNG-fired plants owned by SMC, saying it would drive electricity costs up.

P4P said that LNG is prone to price increases, being vulnerable to global market forces.

The Meralco subsidiary, Meralco PowerGen Corp. (MGen) and Aboitiz Power Corp. subsidiary, Therma NatGas Power Inc. (TNGP), plan to form a joint venture company named Chromite Gas Holdings that will invest in two gas-fired plants owned by SMC’s subsidiary, San Miguel Global Power Holdings Corp. (SMGP).