By Alena Mae S. Flores
Power retailer Manila Electric Co. said Monday it is finalizing a one-year 670-megawatt emergency power supply agreement with Aboitiz Power Corp. and San Miguel Corp. to replace its 2019 power supply agreements which were subjected to a writ of preliminary injunction by the Court of Appeals.
Meralco head of regulatory management office Jose Ronald Valles said at the sidelines of the Philippine Electric Power Industry Forum organized by the Independent Electricity Market Operator of the Philippines they received offers from Aboitiz Power’s GNPower Dinginin Ltd. Co. for 300 MW and from SMC for 370 MW beginning March 26 at an average rate of P7.80 per kilowatt-hour with a pass-through fuel cost.
“That is only for one year, and we were able to get a certificate of exemption from DOE, and we are now in the process of finalizing the agreements with the two generators…This is cheaper than what we previously signed,” Valles said.
He said SMC would supply Meralco 370 MW from its coal plants for two months, then shift to liquefied natural gas once available. GNPower will supply 300 MW from its 1,336-MW coal plant in Mariveles, Bataan.
Meralco previously executed a second EPSA with GNPower Dinginin for 300 MW of baseload capacity covering the period Feb. 3 to Feb. 25, 2023 for P8.5250 per kWh. This was higher than the first EPSA which carried a fixed price of P5.95 per kilowatt-hour in January.
The contracts replaced the 670 MW capacity under Meralco’s 2019 power supply agreement with SMC Global Power Holdings Corp. subsidiary South Premiere Power Corp., which was issued an injunction by the CA.
SPPC’s contract was at P4.30 per kWh under the 2019 PSA. SPPC announced it would stop supplying to Meralco on Dec. 7, 2022, following the CA’s issuance of a temporary restraining order in favor of the company.
This prompted the distributor to look for other suppliers or tap the Wholesale Electricity Spot Market or the trading floor of electricity.
SMCGP asked the ERC for a temporary rate increase, citing gas constraints at SPPC’s Ilijan plant and an unprecedented rise in coal prices for the 1,200-MW Sual coal plant in Pangasinan under San Miguel Energy Corp.
Its petition was rejected by the ERC, forcing SMGCP to elevate the matter to the CA where it was granted a WPI for the SPPC case.
Meanwhile, Valles said Meralco was studying its options regarding the decision of SMC to terminate its 2021 power supply contracts.
SMC Global Power Holdings Inc. also decided to terminate its power supply agreements with Meralco totaling 1,800 megawatts that was supposed to be delivered from 2024 and 2025.
Valles said they planned to DOE to approve the holding of another CSP for the 1,800- MW of capacity for 2024 to 2025 supply months.
SMCGP issued notices of termination for the PSA of subsidiaries Excellent Energy (1,200 MW) and Masinloc Power Partners (600 MW).
Valles said the notices of termination cited the PSA provision allowing termination for non-occurrence of several conditions for the commencement and acceptance of the PSA as the Energy Regulatory Commission had yet to issue a final approval for the said PSA “by the longstop date that was six months after said filing.”
The termination would be effective upon the lapse of 15 days from Meralco’s receipt of the notice, or on April 1, 2023.
