The Manila Electric Co. (Meralco) is considering the suggestion of the energy department to source its additional power requirements from the Power Sector Assets and Liabilities Management Corp. (PSALM).
The company issued the statement after the utility firm’s request to exempt its interim power supply agreement (IPSA) with Masinloc Power Planters Co. Ltd. (MPPCL) from the competitive selection process (CSP) was denied.
“As mentioned by Energy Undersecretary Felix William Fuentebella, Meralco is in discussions with PSALM for possible supply,” said Meralco utility economics head Lawrence Fernandez.
The Department of Energy (DOE) earlier denied Meralco’s request because, according to Fuentebella, “Meralco cited the wrong grounds.”
Meralco’s next move was to file for a motion for reconsideration. However, Fuentebella said Meralco is “coming up with another strategy.”
“I personally talked to them and I don’t think there will be no more motion,” said the DOE official. Instead, Fuentebella told Meralco that they should consider sourcing from state-owned PSALM. “Under Section 2 of the CSP policy, there is an option there to source from PSALM. The rates are already pre-approved by the Energy Regulatory Commission (ERC).”
Fernandez couldn’t provide details yet as discussions with PSALM’s are ongoing.
It can be recalled that Meralco First Vice President Jose Ronald Valles said that aside from the company’s request for the IPSA to be exempted from the ERC, Meralco also asked the ERC to extend the implementation of the IPSA.
The 220-megawatt (MW) Meralco-MPPCL IPSA expired this year. There is also a provision there that Meralco could increase the supply from MPPCL from 220 MW to up to 260 MW. The IPSA is priced at P6.9161 per kilowatt-hour.
Meralco had said that it may have to resort to buying from the Wholesale Electricity Spot Market, the price of which is much higher. As such, it asked the DOE and the ERC to just extend the IPSA and exempt it from conducting a competitive bid.
