SMC still keen on power auctions
BY LENIE LECTURA – OCTOBER 10, 2022
from Business Mirror
Conglomerate San Miguel Corp. (SMC) said it would still participate in future power supply auctions despite the unfavorable ruling from the regulators released last week.
“Of course, lahat naman ng government bid sinasalihan natin,” said SMC President Ramon S. Ang.
He said the power units of SMC would still consider offering a fixed price for power supply deals for as long as the rules are crafted and approved by the Department of Energy (DOE). “Sasali kami lagi pero based sa conditions at TOR (Terms of Reference) ng DOE.”
The rules of the Competitive Selection Process (CSP) are crafted and promulgated by the DOE.
In its advisory, the DOE said the CSP policy aims to promote the needs of the consumers as presented in the Distribution Development Plan and Power Supply Procurement Plans of the distribution utilities (DUs). The DU will embrace the principle of technology neutrality and consider the reliability of energy services in a least cost manner. The DU will also ensure that it can meet the demand for its captive market at any given time.
Ang said the fixed price offer in the 2019 power supply agreements (PSAs) of South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) with the Manila Electric Co. (Meralco) was not the company’s idea or proposal.
“Hinde naman sa amin nanggaling ‘yun, sa DOE galing. Hinde kami ang gumawa ng rules.”
The ERC denied last September 29 the joint plea of SMC’s units and Meralco to adjust their previously approved power rates by P0.30 per kilowatt hour (kWh) over a period of six months. Since their application for a temporary relief was denied, SMC is poised to terminate the PSAs with Meralco after 60 days from receipt of the ERC order.
Once the termination of the PSAs takes effect, SPPC and SMEC will sell its power in the Wholesale Electricity Spot Market (WESM) and enter into bilateral contracts with other offtakers, pricing of which will be market-based.
WESM prices, however, could be more expensive than the rates that SMC and Meralco cited in their joint plea.
