MANILA ELECTRIC Co. (Meralco) said it will seek approval from the Energy Regulatory Commission (ERC) for a 200-megawatt (MW) emergency power supply agreement (EPSA) with a unit of San Miguel Corp. (SMC), a deal expected to save consumers P3.88 billion.
“Considering the resulting deficit of baseload capacity and the approaching peak demand during the summer months, Meralco notified the ERC of its need to enter into an EPSA,” Jose Ronald V. Valles, Meralco’s senior vice-president and head of regulatory management, told reporters on Monday.
Sual Power, Inc., a subsidiary of San Miguel Global Power Holdings Corp. (SMGP), emerged as the supplier with the lowest offer among six power generators that submitted offers to Meralco.
SPI operates the 1,200-MW coal-fired power plant in Pangasinan, the largest coal-fired power facility in the Philippines in terms of installed capacity.
Mr. Valles said Meralco secured a contract price of P5.05 per kilowatt-hour (kWh) from SPI, plus a line rental cap of P0.10 per kWh for the entire 200-MW capacity.
“Parties already implemented the EPSA due to the urgency, starting Jan. 26, 2025, and the application is currently undergoing pre-filing with ERC,” he said.
In its application with the ERC, Meralco said the delivered rate under the EPSA is lower by approximately P2.2281 per kWh compared to the effective cost of P7.3781 per kWh if the equivalent capacity were sourced from the Wholesale Electricity Spot Market (WESM), the country’s electricity trading platform.
“In fact, by sourcing the capacity through the Meralco-SPI EPSA, Meralco’s average blended generation rate will be reduced by about P0.1012 per kWh… resulting in savings to consumers of about P3.882 billion,” the application read.
The term of Meralco’s EPSA with SPI does not exceed one year, running from Jan. 28, 2025, to Jan. 26, 2026.
Meralco sought the EPSA after being compelled to find an alternative supply source following ACEN Corp.’s move to terminate its 2019 power supply agreements (PSAs) with the utility.
On Nov. 2, 2024, ACEN ceased supplying Meralco with 200 MW of baseload capacity, citing financial losses due to a “change in circumstances” in 2022 that affected both PSAs.
ACEN and Meralco jointly filed motions for price adjustment (JMPAs) with the ERC in February last year, but the petition remains unresolved.
“As such, pending resolution of the JMPAs and guidance from the ERC, Meralco’s customers are now exposed to and continue to be exposed to the volatile prices of the WESM, involving 200 MW of baseload capacity until Meralco secures a replacement PSA,” Meralco and SPI said.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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