Power retailer Manila Electric Co. said Monday the fuel-swapping arrangement aimed at addressing the electricity supply shortage during the dry months will take effect on Feb. 26.
Meralco first vice president and head of regulatory management Jose Ronald Valles said industry stakeholders discussed on Jan. 5 the proposed salient provisions of the memorandum of agreement that would govern the “fuel-swapping arrangement”.
The stakeholders agreed that the program’s implementation should commence after the approval by the Energy Regulatory Commission.
“The target for this is to take effect starting Feb. 26, 2023. Again this will take effect upon endorsement of the DOE [Department of Energy] and approval of the ERC, and the objective really is to address any potential supply deficiency,” Valles said during a forum organized by the Philippine Chamber of Commerce and Industry.
Valles said Meralco received an offer from San Miguel Corp.’s South Premiere Power Corp. to supply power from the 1,200-MW Ilijan natural gas power plant in Batangas provided that it would be “full fuel pass-through.”
He said the DOE called a meeting on Dec. 27 with First Gas, SPPC, Meralco and the Malampaya consortium on the yellow alerts projected for 2023 if the Ilijan plant would not operate.
Valles said the DOE expressed full support for the fuel swapping “for the good of the country and committed to help with the government processes required to implement the fuel swapping arrangement.”
He said First Gas agreed to temporarily re-allocate an agreed volume of its Malampaya gas allocation under its gas sale and purchase agreement with the Malampaya consortium, enabling the Ilijan plant to operate and produce the agreed capacity.
He said First Gas would continue to supply to Meralco by temporarily operating its Santa Rita plant using alternative fuel. SPPC also vowed to make the agreed capacity from the Ilijan plant available to Meralco.
Valles said Meralco was conducting a competitive selection process for 180 MW of baseload supply and 300 MW of peaking supply from February to July to help shield customers from volatile spot market prices in cases of supply deficiency.
Meanwhile, Meralco said it received verbal advice from Aboitiz Power Corp. for the extension of the emergency power supply agreement for 300-megawatt baseload capacity from GNPower Dinginin Ltd. which would expire by Jan. 25, 2023.
The EPSA will partially replace the 670-MW capacity under Meralco’s 2019 power supply agreement SPPC, which was subjected to a 60-day temporary restraining order issued by the Court of Appeals.
GNPower Dinginin offered P5.96 per kWh, higher than SPPC’s contract of P4.30 per kWh under the 2019 PSA.
Valles said consumers experienced higher rates in January of P0.2291 per kWh because of the cessation of SPPC’s PSA on Dec. 7.