ERC urged to junk power supply deals without ECC

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ERC urged to junk power supply deals without ECC
Photo by Victor V. Saulon

AN intervenor in the seven power supply agreements (PSA) being sought for approval by distribution utility Manila Electric Co. (Meralco) has asked the Energy Regulatory Commission (ERC) to dismiss outright the applications without the required environmental compliance certificates (ECC).

In a statement, Romeo L. Junia, who represents the consumer group Power for People coalition, said he had filed with the ERC a motion to dismiss what he called “defective” applications.

Mr. Junia, a consumer intervenor opposing the seven Meralco PSAs, said he made the filing after he obtained a copy of the March 20, 2018 order of the ERC, which its chairperson Agnes T. Devanadera earlier disclosed to reporters. She said the ERC had ordered about three PSAs without the required ECC to submit the document. The deadline falls due on the third week of June, she added.

Mr. Junia identified the three PSAs as those forged by Meralco with Central Luzon Premier Power Corp. (CLPPC), Mariveles Power Generation Corp. (MPGC) and Global Luzon Energy Development Corp. (GLEDC) In all, they cover a total of 1,600 megawatts (MW).

“The lack of ECC is fatal because the rules require as supporting document the [ECC] issued by the Department of Environment and Natural Resources to the generation company,” he said.

Meralco had sought approval for the PSAs ahead of an expected increase in power demand while existing contracts are set to expire.

Ms. Devanadera earlier said that she had inhibited from the deliberation on the PSA with Atimonan One Energy, Inc. (A1E), the project company developing a 1,200-MW coal-fired power plant in Atimonan, Quezon province.

She said the reason for her decision was because she hails from that province. She had served as mayor of one of its towns.

“Plus may consultancy ako noon, napakaliit naman (I have a consultancy firm before, but it’s very small),” she said about a possible conflict of interest. She did not say which Meralco entity had been her client.

The vote on the Atimonan plant’s PSA comes at a time when two of the ERC’s four commissioners are scheduled to retire on July 10, 2018.

“Remember, even if there’s a quorum there should be three approving the rate,” Ms. Devanadera said.

Meralco PowerGen Corp. (MGen), the power generation arm of Meralco and the parent firm of A1E, is building the P107.5-billion power plant. The plant will be financed through a loan that could not be closed because of a PSA requiring ERC approval.

Meralco previously warned of the escalating cost on the distribution utility should the delay in the PSA approval stretch beyond what is acceptable to the plant’s contractors. For lenders, a PSA is an assurance that a power plant project will bring in a steady stream of revenues to guarantee loan repayment.

Meralco had agreed to buy 1,200 MW of the electrical output of A1E, which previously expected the 600-MW first unit of the project to reach testing and commissioning in December 2020. The second 600-MW unit is set to go through the same process in May 2021. Their respective commercial operation is scheduled in the fourth quarter of 2020 and the fourth quarter of 2025.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon