Manila Bulletin

Meralco receives new offers for 670MW capacity

Power utility giant Manila Electric Company (Meralco) divulged that it received new offers for one-year contract to cover 670 megawatts of capacity that will replace the cheaper fixed price contract of the Ilijan gasfired power plant of South Premiere Power Corporation (SPPC) of the San Miguel group.

It has to be noted that the supply of capacity from the Ilijan generating asset had been effectively stopped following the issuance of injunction by the Court of Appeals (CA) on the 2019 power supply agreement (PSA) sealed between Meralco and SPPC.

In an interview with reporters, Meralco First Vice President and Head of Regulatory Affairs Jose Ronald Valles said “we received new offers from GNPD (GNPower Dinginin) for 300MW and SPPC/ SMC (of the San Miguel group) for 370MW, that will be for a total of 670MW.”

He added “that will be for one year (PSA), because we secured certificate of exemption from the DOE (Department of Energy) and we are now in the process of finalizing the agreements with the two generators.”

Once the power supply deals are firmed up, the first month for the capacity delivery will be for billing cycle starting March 26 to April 25 this year; and that will last for 12 months.

Valles qualified that the offered delivered rates had been at average P7.80 per kilowatt hour (kWh) – which is higher than the original PSA sealed for the Ilijan plant in 2019 at just more than P4.00 per kWh.

He further stated that these new offers will be cheaper than the P8.5250 per kWh (inclusive of taxes and ancillary services) that was contracted by Meralco through an emergency power supply agreement (EPSA) with GNPD for the January 26-February 25 supply month.

GNPD is the biggest coal plant in the Luzon grid with two units of aggregate 1,336MW capacity – and this is a joint venture between Aboitiz Power’s Therma Power Inc., AC Energy Holdings, Inc. of the Ayala group and Power Partners Ltd. Company; while SPPC is the operating entity of

the Ilijan gas-fired plant of SMC Global Power Holdings Corp.

The cessation of supply from the Ilijan plant stemmed from judicial rulings that ensued because of the P0.30 per kWh rate hike denied in

September by the Energy Regulatory Commission (ERC) – which now appears to be a cheaper option compared to the new higherpriced contracts being cornered by Meralco.

Valles conveyed that the rate offers of the two firms are of ‘fuel pass through’ nature, hence, the rates could change every month depending on the swing of coal and gas prices in the world market.

The Dinginin plant is utilizing coal for its electricity generation; while the Ilijan plant is anticipated to run on imported liquefied natural gas (LNG) when this commodity will already reach Philippine shores by the middle of this year.

For the SMC-committed supply, in particular, the Meralco executive specified that “for the initial two months, the capacity will be coming from a coal plant; then after that, the capacity will already be drawn from Ilijan which will be running on LNG, because that has been its commitment to the DOE.”

The return-to-operation of the Ilijan plant is being depended upon by the energy department as added measure to shore up electricity supply during the critical months of summer. (Myrna M. Velasco)

Business News

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2023-03-22T07:00:00.0000000Z

2023-03-22T07:00:00.0000000Z

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