The Energy Regulatory Commission has vowed to act on the motion for reconsideration filed by Manila Electric Co. and San Roque Hydropower Inc. (SRHI) on its approved provisional authority (PA) for their power supply agreement (PSA).
The commission issued a provisional authority for the Meralco-SRHI power supply agreement on Dec. 3, 2024, approving a rate of P5.1908 per kilowatt-hour.
Under the agreement, SRHI is supposed to supply Meralco with 340 megawatts of mid-merit capacity as part of its compliance with the renewable portfolio standards (RPS) effective in February of this year.
Meralco and SRHI submitted a motion for reconsideration because the approved rate was lower than the P6.95 per kWh they had asked for, and the PA limited their sourcing of contracted capacity.
In a comment to the ERC, Meralco stated that the termination of the PSA by SRHI would not only affect its ability to ensure a continuous and reliable supply of electricity to consumers but also its ability to comply with its RPS obligations.
ERC chairman and chief executive Francis Saturnino Juan said if Meralco has no sources for renewable energy generation, it will be forced to purchase renewable energy certificates for about P0.24 per kWh.
This purchase of the RECs by the distribution utilities is recoverable from consumers, but based on certain conditions.
“Therefore, the longer the commission’s action on this application takes, Meralco may be exposed to additional costs to comply with its RPS obligation by purchasing what are called RE certificates from the RE market,” Juan said during an open commission meeting.
The RPS mandates electricity suppliers to source a portion of their energy requirements from renewable sources.
Meralco has already contracted around 1,880 MW of renewable energy capacity from various suppliers — exceeding its initial target of 1,500 MW as part of its long-term sustainability strategy.
Renewable energy is expected to account for 22 percent of Meralco’s supply portfolio by 2030 through its strategic sourcing initiatives.
