The Energy Regulatory Commission (ERC) allowed Manila Electric Co. (Meralco) to source the full 1,200-megawatt capacity of the Ilijan natural gas plant under its power supply agreement (PSA) with San Miguel Corp’s (SMC) South Premiere Power Corp (SPPC).
“After careful deliberation, the commission resolved to add 290 MW to the originally approved capacity… The additional 290 MW shall be subject to the same rate and conditions earlier set by the commission in its order dated May 9, 2024,” the ERC said in a statement.
The ERC said a notice of resolution, signed by chairperson and chief executive Monalisa Dimalanta, would be issued.
It previously allowed Meralco to source only 910 MW from the Ilijan plant in Batangas at a base rate of P5.9282 per kilowatt-hour (kWh).
The commission said that while Meralco awarded 890 MW to 1,200 MW of capacity under the PSA to SPPC, 290 MW was still contracted under an earlier agreement, a mid-merit supply ending December 2024, previously approved by the ERC at a levelized cost of energy (LCOE) rate of P5.136 per kWh.
The ERC said the provisional authority for the 890 MW would protect Meralco’s consumers from volatile prices in the Wholesale Electricity Spot Market (WESM).
The regulator said its simulations showed Meralco’s blended generation rate would be lower by an estimated P0.2828 per kWh, subject to adjustment after the ERC’s deliberation on the PSA’s final authority.
Meralco and SPPC jointly filed an application with the ERC for approval of their PSA after SMC’s unit was declared the winning bidder with an offer of P7.0718 per kWh (total delivered LCOE, VAT inclusive) for 1,200 MW.
The companies said in their filing that, based on certain assumptions, the annual effective rate under the 2024 Meralco-SPPC PSA was P5.9450 per kWh.
Meralco sought approval to conduct a competitive selection process (CSP) due to a projected baseload capacity deficit in its portfolio, covering 810 MW starting Dec. 26, 2023, an additional 200 MW starting Feb. 26, 2024 and a further 190 MW starting March 26, 2024, for a total of 1,200 MW.