Meralco, Aboitiz sign deal for 300-MW power supply

BY LENIE LECTURA – DECEMBER 19, 2022
from Business Mirror

The Manila Electric Co. (Meralco) inked an emergency power supply agreement (EPSA) with GNPower Dinginin Ltd. of the Aboitiz Group for the supply of 300-MW baseload capacity starting December 15 until January 25, 2023.

This will partially replace the 670 MW capacity under Meralco’s power supply agreement with South Premiere Power Corp. (SPPC), which was subjected to a Temporary Restraining Order (TRO) issued by the Court of Appeals.

The EPSA, which has a rate of P5.96 per kWh, will lessen Meralco’s exposure to the Wholesale Electricity Spot Market (WESM) and, in turn, partly shield its customers from volatile and potentially higher generation costs.

Meralco said it is exhausting all measures to continue supplying its customers with sufficient and reliable power, while mitigating the impact of the TRO on its customers.

The utility firm earlier issued a notice of claim against SPPC to cover the additional costs it has been incurring as a result of the 60-day TRO on their Power Supply Agreement (PSA).

Since the cessation of supply last December 7, Meralco has been sourcing the 670 MW contract capacity from WESM.

In its letter dated December 12, 2022, Meralco 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 Court of Appeals eventually resolves the main case and denies the Petition of SPPC.

Meralco said it expects electricity sales this year to grow by close to 6 percent year-on-year due to the strong recovery of the Philippine economy.

“We are looking at close to 6-percent gigawatt (GWh) sales growth for the year 2022 compared to 2021, and this actually also 4 percent higher than 2019 numbers,” said Meralco Chief Commercial Officer Ferdinand Geluz.

He said the main drivers of the projected growth could be attributed to the strong commercial segment. “The rebound of the strong commercial segment as well as modest growth in industrial sector driven by some industries such as plant, F&B (food and beverage) really gave a boost.”

The utility firm earlier reported that as of end-September this year, sales volumes increased by 6 percent to 36,553 GWh from 34,398 GWh in the same period last year.