Meralco, Aboitiz mull over extension of power deal
BY LENIE LECTURA – JANUARY 17, 2023
from Business Mirror
The Manila Electric Co. (Meralco) and Aboitiz Power Corp. may extend their emergency power supply agreement (EPSA) that will expire next week.
“Verbally, I received advice from Aboitiz that they will extend an offer after January 25. But we have not received any from them with respect to the extension of the Dinginin plant. So, I don’t know what will be the capacity offer, if it’s 300 megawatt or less and I don’t know how the rates will be,” said Meralco First Vice President Jose Ronald Valles during a webinar.
Last month, Meralco signed an EPSA with the Aboitiz-led GNPower Dinginin, Ltd. to partially replace the 670-megawatt (MW) PSA with San Miguel Corp.’s South Premiere Power Corp. (SPPC). The EPSA took effect on December 15, 2022 and will end on January 25.
The EPSA, which has a rate of P5.96 per kWh, will reduce Meralco’s exposure to the Wholesale Electricity Spot Market (WESM) and, in turn, partly shield its customers from volatile and potentially higher generation costs.
It can be recalled that the SPPC halted the power supply to Meralco after the issuance by the Court of Appeals (CA) of the 60-day temporary restraining order (TRO) on their PSA.
Meralco then asked SPPC to pay the price difference between the contract price and the WESM price, to which Meralco would be exposed during the effectivity of the TRO.
The claims, Meralco added, will be on top of all applicable fines, penalties, and liquidated damages under the PSA in the event that the CA eventually resolves the main case and denies the petition of SPPC.
Meralco said it has been exhausting all efforts to protect its customers from potentially higher generation costs, while ensuring continuity of stable, reliable, and least cost power under the current circumstances.
Earlier, the Energy Regulatory Commission rejected the petition of San Miguel and Meralco to increase generation charges due to higher costs of coal and natural gas, noting that the agreed price in the PSA is fixed and the causes cited by the companies were not factors for price adjustments.
