FNPC-Meralco power deal gets final approval of ERC

BY LENIE LECTURA – JULY 18, 2022
from Business Mirror

The Energy Regulatory Commission (ERC) has given its final approval to the joint application of First NatGas Power Corp. (FNPC) and the Manila Electric Co. (Meralco) for the final authority to their power supply agreement (PSA).

First Gen Power Corp. said Monday that FNPC has just received the ERC decision, which also affirmed the rates under the provisional authority (PA) granted by the commission last June 2018, subject to certain modifications and conditions.

“FNPC is evaluating the ERC decision,” First Gen said in a disclosure to the stock exchange.

FNPC is a wholly-owned subsidiary of First Gen Corp., and is the owner of the 414-MW San Gabriel combined cycle natural gas-fired power plant.

Earlier, the ERC provisionally approved a rate of P3.7121 per kilowatt hour (kWh), slightly lower than the P3.7712 per kWh rate originally sought by Meralco and FNPC.

The agency’s final merely order adjusted the capacity charge, local operation and maintenance (O&M) fee, foreign O&M fee, and fuel cost.

“Similar to the Commission’s grant of interim relief, the rates shall be subject to the adjustment formula as indicated in the subject PSA,” the ERC said in its 99-page order.

Also, the ERC said the outage allowance should be adjusted to 20.2 days, consisting of a planned outage of 12.5 days and an unplanned outage of 7.7 days. However, the adoption of the reduced outage days should be prospective.

“Any adjustment in the rates brought about by such adjustment in the outage shall be reflected in the submissions to the Commission for monitoring purposes,” it said.

The ERC directed Meralco to attach to its automatic generation rate adjustment submission the computation of the monthly fuel cost.