The Energy Regulatory Commission said it approved the applications of power retailer Manila Electric Co. and three suppliers to withdraw their power supply agreements in the wake of the Supreme Court’s ruling on the competitive selection process.
ERC allowed Meralco to withdraw its respective applications for PSA approval with Redondo Peninsula Energy Inc., Atimonan One Energy Inc. and Global Luzon Energy Development Corp.
“In view of the Supreme Court decision cited by Meralco and A1E as the ground relied upon for their withdrawal, the commission grants the withdrawal of applicant’s joint application,” ERC said in a decision dated Aug. 13.
Meralco and the three power generators said they were constrained to move for the withdrawal of the joint applications for PSA after the Supreme Court ordered the conduct of CSP or public bidding in the procurement of supply of distribution utilities.
The SC ruled that all PSA applications submitted by distribution utilities to the ERC on or after June 30, 2015 should comply with the CSP.
The SC acted on the petition of Alyansa Para sa Bagong Pilipinas stopping the ERC from approving Meralco’s PSA and seeking nullification of ERC Resolution No. 1 Series of 2016.
The ERC resolution sought to extend from October 2015 to April 2016 the effectivity of ERC Resolution No. 13 Series of 2015 directing all distribution utilities to conduct CSP in the procurement of their supply to the captive market.
Meralco and RP Energy, Atimonan One and Global Luzon filed their PSA applications on April 29, 2016. The applications formed part of 3,551 megawatts of PSAs signed by Meralco with seven power generators.
Meralco earlier sought the approval of its supply agreement with RP Energy for the supply of 225 MW for baseload requirements which was supposed to have a rate impact reduction of P0.1327 per kilowatt-hour.
RP Energy, which is majority controlled by Meralco PowerGen Corp., is building a 600-MW coal-fired power plant in the municipality of Subic in Zambales province.
Meralco PowerGen is the power generation arm of Meralco. Other RP Energy shareholders are Aboitiz Power Corp. and Taiwan Cogeneration International Corp.
Meanwhile, Meralco agreed to purchase Atimonan One’s entire 1,200-MW electrical output with a rate reduction of P0.7799 per kWh.
Atimonan One, also majority controlled by Meralco PowerGen, is putting up a 1,200-MW supercritical coal-fired power generating facility in Atimonan, Quezon.
The power distributor was also supposed to purchase 600 MW from Global Luzon which was planning to build a 670-MW coal-fired power generating facility in La Union.
