Meralco, Tarlac solar firm seek regulator’s nod for supply deal
By Lenie Lectura – October 25, 2017
from Business Mirror
THE Manila Electric Co. (Meralco) and Solar Philippines Tarlac Corp. (SPTC) are seeking regulatory approval to implement their power supply agreement (PSA). The two claim that the timely implementation of the signed agreement will “best serve the interests” of consumers.
Under the PSA, SPTC will supply Meralco 75 megawatts (MW) to 85 MW for five years and another 85 MW from the sixth up to the 20th year for P2.9999 per kilowatt-hour (kWh). This rate is significantly lower than the prevailing solar feed-in-tariff (FiT) rates. For one, the simulated delivered price under the PSA would be P3.099 per kWh, significantly lower than the prevailing FiT rates and the lowest tariff offer that Meralco has received for a solar technology. This will result in a reduction of Meralco’s generation charge by about P0.0033 per kWh.
“The simulated delivered price of P3.099 per kWh provides for a much lower cost of power compared to the simulated effective cost at the Wholesale Electricity Spot Market (WESM) of P3.8524, thereby resulting in savings to the consumers of about P0.7525 per kWh,” an 18-page application filed before the Energy Regulatory Commission (ERC) said.
The two firms claim that if implemented, the PSA would also contribute to the government initiative of encouraging the development of renewable energy (RE) in the country.
“The commission’s approval of the PSA will send strong signals to renewable or solar energy-generation projects in the Philippines and, thus, set the pace for infusion of similar investments by the private sector,” Meralco and SPTC said.
Meralco said it needs to source additional peaking capacity through bilateral power supply contracts to ensure its customers of continuous and reliable electricity.
Based on the power situation outlook for 2017 and succeeding years, Meralco foresees a peaking capacity deficit in its portfolio due to the expected high demand, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants. Based on its distribution development plan for the period 2015-2024, Meralco’s aggregate capacity requirement is forecasted to grow by a compounded average growth rate of 3.7 percent.
“It bears emphasis that based on Meralco’s foreseen peaking capacity deficit, there is an urgent need for the provisional approval of the PSA,” the application said. The firms also asked the ERC that “after hearing on the merits, render a decision approving the PSA between Meralco and SPTC.”
SPTC is building and shall own, operate, manage and maintain a solar-power plant capable of supplying up to 85 MW, which is located in the municipality of Concepcion, Tarlac.
“Considering that SPTC’s solar-power plant is expected to achieve commercial operations in the fourth quarter of 2017, an immediate implementation of the PSA would redound to the benefit of the consumers in terms of environmental benefits,” they added.
