Meralco seeks regulatory approval for first solar power supply contracts

Power distribution giant Manila Electric Co. (Meralco) is seeking regulatory approval for its solar power supply contracts totalling 100 megawatts (MW) after undergoing price challenge as directed under the competitive selection process (CSP) policy.

The company has concluded the price challenge for its two solar power supply contracts, Meralco SVP and head of customer retail services and corporate communications Alfredo Panlilio said in a recent interview.

Previously, Meralco signed separate 50-MW supply contracts with Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar Inc. to diversify its power requirements.

Both solar developers have offered a price of P5.39 per kilowatt-hour (kwh) for a period of 20 years, lower than the latest solar feed-in tariff (FIT) rate of P8.69 per kwh, once their respective projects start operation.

Both contracts were subjected to a price challenge, where only the offer made by Power Source received a counter-offer from 7 Balboa of Soleq, the solar power arm of Singapore-based Equis Funds Group Pte Ltd., Panlilio said.

“7 Balboa made an offer of P4.69 per kwh from P5.39 per kwh. But Power Source decided to match it,” he said.

“Now it’s up for ERC (Energy Regulatory Commission) approval because we went through the CSP process for both,” Panlilio said.

Under the CSP policy, distribution utilities and electric cooperatives are mandated to undertake a bidding before finalizing power supply agreements with generation companies.

If cleared by the ERC these will be Meralco’s first renewable energy power supply contracts in its portfolio.

Under the deal, Solar Philippines will supply 25 MW from solar farms from its solar farms in Tanauan, Batangas and Naic, Cavite, targeted for completion in February and April 2017, respectively.

On the other hand, PowerSource is currently developing a 50-MW solar farm in of San Miguel, Bulacan scheduled for completion in August 2018.

The original offers made by Solar Philippines and Power Source are already competitive with other technologies in terms of pricing, Australia-based International Energy Consultants (IEC) managing director John Morris said earlier.