Meralco asks ERC to approve supply contract with First Natgas
By Alena Mae S. Flores – March 25, 2018 at 07:20 pm
from manilastandard.net
Manila Electric Co. and First NatGas Power Corp., a wholly-owned subsidiary of First Gen Corp., filed an application with the Energy Regulatory Commission to approve their power supply agreement.
Meralco and First Natgas signed a PSA for the sale and purchase of 414 megawatts of baseload capacity from San Gabriel natural gas plant in Batangas City.
Under the agreement, power will be sourced from the currently operational 414-MW San Gabriel combined cycle natural gas-fired power plant located within the First Gen Clean Energy complex.
“Based on the power supply situation outlook for 2017 and succeeding years, Meralco foresees a capacity deficit in its portfolio due to the expected high demand as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants,” the two companies said in a joint application.
Meralco’s aggregate demand is expected to grow by a compounded average growth rate of 4.13 percent from 2018 to 2023, based on its distribution development plan.
“The timely implementation of the PSA will best serve the interests of the consumers,” the parties said.
The application stated that the 414-MW capacity from the San Gabriel natural gas plant of First Natgas at P3.8637 per kilowatt-hour would be lower than the simulated effective cost of the Wholesale Electricity Spot Market of P4.4405 per kWh.
WESM acts as the country’s trading floor of electricity.
“It is thus imperative that this PSA is implemented as soon as possible as any delay in its implementation would translate into foregone savings of about P0.0561 per kWh and missed economic opportunities for Meralco’s captive customers,” the companies said.
First Gen earlier said the PSA would carry a six-year term, “using gas from the Malampaya field, but, in the event that liquefied natural gas becomes available, the term of the PSA could be extended upon mutual agreement with Meralco.”
