MANILA Electric Co. (Meralco) said it awaits the approval of the Energy Regulatory Commission (ERC) for its 400-megawatt (MW) power supply agreement (PSA) with San Miguel Corp.’s power unit to help boost its energy requirements.
“We are asking ERC to immediately grant the provisional authority so that we’ll help in addressing Meralco requirements, Meralco’s requirements only for the summer,” Jose Ronald V. Valles, Meralco’s first vice-president and head of its regulatory management, said on Monday.
In a joint application filed last week, Meralco and Limay Power, Inc. said that their PSA “has a competitively procured contract price for interim baseload capacity supply after undergoing CSP (competitive selection process).”
“In fact, such a contract price is even lower than the recent offers received by Meralco for an interim baseload supply,” the application read.
On April 26, Meralco filed an urgent motion to resolve provisional authority/interim relief due to the recent red and yellow alerts and “high prices” in the Wholesale Electricity Spot Market (WESM).
Asked about the target, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that the 400-MW supply deal is “immediately implementable.”
“[We are] working out targets as there are also other EPSAs (emergency power supply agreement) and PSAs, not just Meralco’s, that we need to also address,” she said in a Viber message.
Meanwhile, Meralco may be more exposed to the spot market as the single offeror for the 260-MW deal has withdrawn.
WESM is where energy companies can buy power when their long-term contracted power supply is insufficient for customer needs.
In March, the power distributor declared failure of the second round of competitive bidding as it received no expressions of interest upon the deadline.
Mr. Valles said that Meralco commenced direct negotiation with San Roque Hydropower, Inc. (SRHI), one of the bidders in the first round, for the needed power supply.
Lawrence S. Fernandez, chairman of Meralco’s bids and awards committee for PSAs, has said that the company may engage in negotiated procurement after two failed bids based on the ERC rules.
However, Mr. Valles said that SRHI withdrew as it “will not be able to generate the required portion of the target 260-megawatt peaking capacity due to El Niño.”
Apart from SRHI, Meralco did not receive any other offer from other power suppliers, he said.
“If we are unable to find a generator that is willing to supply the 260 [MW]… we have to source it from the market to the extent that we need, up to 260 MW,” Mr. Valles said.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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