The Energy Regulatory Commission (ERC) issued an interim approval to Central Negros Electric Cooperative Inc. (CENECO) for the implementation of its power supply agreement (PSA) with Lopez-led Energy Development Corp. (EDC).
The move is meant to arrest the increasing electricity rates affecting Negros Occidental province.
The ERC, in a notice of resolution dated May 29, 2024, gave interim relief for EDC to supply power to CENECO at a rate of P5.5657 per kilowatt hour (kWh).
The regulator said the interim PSA approval is expected to reduce CENECO’s generation rate amid high electricity prices in the province and mitigate its exposure to the Wholesale Electricity Spot Market (WESM), where the electric cooperative is observed to be buying almost 74 percent of its supply.
The ERC said the grant of approval imposes obligation on EDC to provide replacement power to CENECO. It also noted that the final generation cost that EDC can charge is still subject to review by the commission.
“If the final approved rate is lower than the provisional rate granted, the EDC is duty-bound to refund to CENECO, and CENECO is also mandated to credit the same in the electric bills of consumers,” the ERC said.
EDC is the country’s largest geothermal producer. It owns and operates the 49-megawatt Nasulo geothermal power plant in Valencia, Negros Occidental.
Under the PSA filed with the ERC, EDC will supply baseload power to CENECO for 10 years at a contracted capacity of 20 MW.
The parties said that based on a rate impact analysis, the immediate implementation of the PSA will result to an estimated generation rate reduction of P0.0367 per kWh.