THE Energy Regulatory Commission (ERC) approved the appeal of AC Energy Philippines, Inc. (ACEPH) to charge Manila Electric Co. (Meralco) a P4.99 per kilowatt-hour (kWh) rate for 60% contracted capacity, which it said is relatively lower compared to the utility’s former supply contracts.
In a recently published ruling, the regulator revised its former order regarding the power supply agreement (PSA) between the two power companies, taking into consideration AC Energy’s plant capacity factor (PCF) and its proposed contract price in the electricity fee structure of their contract.
According to AC Energy, the former provisional authority rate that the ERC approved on Dec. 10, 2019 is different from the price and capacity that it agreed with Meralco in their PSA.
In their supply agreement, the two companies agreed on a 45% minimum energy offtake priced at P6.48/kWh and a P4.9873/kWh rate for a 60% contracted capacity.
The ERC said it did not consider the PCF as it was still subject to clarification when the order was issued.
Meralco’s terms of reference were made in a way that provides it some flexibility to procure electricity requirements from 45% to 60% PCF, AC Energy said.
Without consideration of its PCF as a mid-merit supplier, the former order increases the market risk of the generation company, it said.
“Meralco is given the ability to efficiently manage its supply requirements based on available least-cost supply to the benefit of its consumers. On the other hand, ACEPH will also be able to reasonably recover its investment cost and operating cost,” the ERC said, affirming the appeal for reconsideration.
The new approved rate is P0.75 higher compared to ERC’s former order which approved a rate of P4.2366/kWh.
It noted that the latest rate is “relatively lower” and “more stable” compared to those under Meralco’s expired contracts.
Further, the ERC allowed the retroactive application of the rate as it is also permitted in their PSA.
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. — Adam J. Ang
