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Wednesday, April 17, 2024

Meralco, San Miguel Global discuss new emergency power supply deal

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Power retailer Manila Electric Co. is in talks with San Miguel Global Power Holdings Corp. for a new emergency supply deal after its 330-megawatt supply contract from the 1,200-MW Sual power plant in Pangasinan ended, an executive said Tuesday.

“The 330 MW that is being supplied by the Sual power plant was already terminated effective midnight of July 24. That was after they sent a notice of termination last July 17,” Meralco first vice president and head of regulatory affairs Jose Ronald Valles said.

“To ensure continuity of supply and minimize exposure to volatile WESM [Wholesale Electricity Spot Market] prices, Meralco is negotiating with a potential supplier for a new emergency power supply agreement to replace the capacity of SMEC,” he said.

The move followed the Court of Appeals’ joint decision dated June 27, 2023 granting the price adjustment sought by South Premier Power Corp. (Ilijan plant) and San Miguel Energy Corp. (Sual plant).

The CA also made permanent the writ of preliminary injunction granted to SPPC, which allowed the Ilijan plant to cease supplying 670 MW to Meralco. SMEC’s petition for WPI, meanwhile, was declared moot and academic.

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Valles said it looked for a replacement capacity from different power suppliers and wrote several power suppliers, but most of them declined, with only San Miguel Global responding favorably.

“San Miguel made an offer, It’s the one on the table. That is Ilijan for the 330 MW. If we are able to sign that and are able to get approval from the ERC, then we can implement that immediately and add that to the 480 MW that we are already implementing and that will add a term of until March 25, 2024,” Valles said.

Valles said Meralco was also preparing to bid out supply to replace the two other contracts that were terminated by San Miguel Global.

San Miguel Global decided to terminate its PSAs with Meralco totaling 1,800 MW for delivery starting 2024 and 2025 due to the Energy Regulatory Commission’s non-issuance of the final approvals within the respective long stop dates in September 2021.

“For the 1,800 MW that was being supplied by Excellent Energy for 1,200 and 600 [MW] by Masinloc, both of those contracts have been terminated by San Miguel on the lapse of six-month period under the PSA,” Valles said.

“They sent us a notice of termination. We are waiting for the ERC to act on the termination of these contracts because the ERC has advised us to await their approval of the termination. In the moment we receive that approval from the ERC, then we will proceed with the CSP for the 1,800 MW. The ToR is ready for publication,” he said.

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