The Energy Regulatory Commission has granted an interim relief on the power supply contracts between San Miguel Consolidated Power Corp. and five Mindanao distribution utilities.
ERC said in a statement the interim relief would enable San Miguel Consolidated Power to obtain financial closing with various lenders.
San Miguel Consolidated Power would be authorized to implement its respective supply agreements with the said distribution firms, pending ERC’s completion of the adjudication process and technical evaluations of the subject applications.
The temporary relief was given to five separate applications jointly filed by San Miguel with Cotabato Electric Cooperative Inc., Surigao del Sur II Electric Cooperative Inc., Zamboanga City Electric Cooperative Inc., Davao del Sur Electric Cooperative Inc. and Agusan del Sur Electric Cooperative Inc..
San Miguel’s supply agreements cover a period of 10 years and involve a contract capacity of 10 MW for Cotabato Electric; 5 MW for Surigal del Sur Electric II; 35 MW for Zamboanga City Electric; 10 MW for Davao Del Sur Electric and 10 MW for Agusan del Sur Electric.
San Miguel will supply the electric cooperatives a part of its capacity from the 300-MW circulating fluidized bed coal-fired power plant in Malita, Davao del Sur.
“The ERC’s decision to grant interim relief to SMCPC pertaining to its PSCs will help augment the deficient supply of power in Mindanao and ensure continuous power supply through the timely delivery of committed new capacities,” ERC chairman Jose Vicente Salazar said.
ERC said the concerned distribution utilities might already include in the computation of its generation charge the costs incurred for the supply that would be eventually sourced from San Miguel once commercial operations commenced.
The regulator said an initial evaluation of the supply agreements showed that the proposed rates were lower compared to two comparable plants with the same fuel source and capacity.
ERC said in the event that the final rate was higher than the interim rates granted, San Miguel should collect the additional charges from the concerned distribution firms.
The regulator said the interim relief of the supply agreement is without prejudice to any findings by the ERC in its evaluation of the proponent’s application for certificate of compliance which was needed prior to the commencement of commercial operations.
