Meralco, SMC power unit seek approval of 330-MW supply deal
By Alena Mae S. Flores – October 13, 2023, 9:05 pm
from manilastandard.net
MANILA Electric Co. (Meralco) and South Premiere Power Corp. (SPPC) of the San Miguel Group filed a joint application with the Energy Regulatory CommissIon (ERC) for the approval of their 330-megawatt emergency power supply agreement.
The EPSA covers Aug. 26 to March 25, 2024 at a delivered rate of P 8.0716 per kilowatt-hour which excludes value added tax but includes line rental.
“The implementation of the Meralco-SPPC August 2023 EPSA will afford Meralco’s end-users with a reliable supply of electricity at reasonable rates,” the application read.
The parties said the EPSA would ultimately redound to the benefit of Meralco customers who stand to be exposed to volatile prices at the Wholesale Electricity Spot Market (WESM), the trading floor of electricity.
SPPC, a unit of San Miguel Power Global Holdings Corp. owns and operates the 1,200-MW combined-cycle power generating facility in Barangay Ilijan, Batangas.
The parties requested the ERC for a provisional authority or interim relief confirming the authority of Meralco and SPPC to implement the EPSA, including the rates and tariff structure.
They said the EPSA’s delivered rate is lower by about P0.3939 per kWh than the effective cost of P8.4655 per kWh if the capacity is sourced from the WESM.
“In fact, by sourcing the capacity through the Meralco-SPPC August 2023 EPSA, Meralco’s average blended generation rate will be reduced by about P0.0328 per kWh, resulting in savings to consumers of about P664 million,” the application said.
The parties said they were compelled to immediately implement the Meralco-SPPC EPSA beginning 12:01 a.m. of Aug. 26, 2023 due to the emergency nature of the unforeseen or unpredicted cessation by San Miguel Energy Corp./Sual Power Inc. of its obligations under the Meralco-SMEC 2019 PSA following a Court of Appeals’ decision dated June 27, 2023.
The parties said the Department of Energy itself was pushing for and welcomed the reopening of SPPC’s Ilijan power plant to stabilize the power supply in Luzon.
