‘Nod for Meralco PSA premature’
By Lenie Lectura – December 18, 2024
from Business Mirror
The Energy Regulatory Commission (ERC) has denied the joint application of the Manila Electric Co. (Meralco) and Masinloc Power Co. Ltd. (MPCL) for provisional approval of their 15-year power supply agreement (PSA).
“Considering that the expected delivery date of the instant PSA shall not occur until August 26, 2025, the urgency of supply from MPCL has not been established. In this regard, the Commission deems it premature to grant a Provisional Authority to the Applicants. Thus, the Application for Provisional Authority and/or Interim Relief by Meralco and MPCL is hereby denied,” the ERC said.
This does not mean that the ERC will not honor the PSA which underwent a competitive selection process (CSP). The commission even noted that the CSP conducted by Meralco is compliant with the 2023 circular of the Department of Energy.
“This one, even if we were to issue provisional approval now, it will not really help Meralco consumers because the contract delivery date says it will be only by August 2025. Their PSA application is still pending with us though. We will decide on it for final approval before August 2025,” said ERC Chairperson Monalisa Dimalanta said when sought for comment. “For now, it’s not justified for a provisional approval.”
Last August, Meralco secured the lowest offers for its 600-MW supply requirement from two power generation companies. MPCL offered P5.6015 per kilowatt hour (kWh) for 500-MW capacity, while GNPower Dinginin Ltd. Co. offered to supply the remaining 100-MW baseload requirement at a rate of P5.7392 per kWh. Both offers were significantly lower than the P7.2609 per kWh reserve price set for the bidding.
Meralco Senior Vice President and Head of Regulatory Management Jose Ronald V. Valles said the main objective of the CSP is to secure the least cost supply for its customers.
“We hope that there will be no further delays…We trust that ERC evaluation and approval will also be swift so customers can enjoy these very low rates upon scheduled delivery date in August 2025.”
Aligned with its annual Power Supply Procurement Plan approved by the DOE, Meralco conducts open and transparent CSPs in full compliance with government rules and regulations.
Meralco is expecting to surpass the P43-billion profit guidance for 2024 it has set in the first half.
“The recent credit rating upgrade from S&P Global reinforces our commitment to maintain financial stability, while strategically growing our businesses in alignment with our long-term objectives. We look forward to another profitable year in 2025 from organic growth and contributions from our new investments, some of which are awaiting approval from the Philippine Competition Commission,” Meralco Chairman Manuel V. Pangilinan had said.
