GNPower Dinginin Ltd. Co. (GNPD) said on Thursday that it is still negotiating the final contract price of its emergency power supply agreement (EPSA) with Manila Electric Co. (Meralco).
“Negotiations are still underway between GNPD and Meralco on a new emergency power supply agreement, and that currently, we have stopped serving the EPSA which expired last February 25,” GNPD President and Chief Executive Officer Dennis Jordan, said in a media release.
GNPD, a power generation company, is a partnership between Aboitiz Power Corp.’s Therma Power Inc.; AC Energy Holdings, Inc.; and Power Partners Ltd. Co.
Meralco forged an EPSA with GNPD after its 670-megawatt (MW) power supply deal with South Premiere Power Corp. (SPPC), the administrator of the gas-fired power plant in Ilijan, Batangas, was subjected to a writ of preliminary injunction issued by the Court of Appeals (CA).
Its most recent EPSA with Meralco ended on Feb. 25 and covers 300 MW and had a full fuel pass-through structure.
“The expiration of this second EPSA led to dialogues for a new contract to continue the partial replacing of 670 MW that is the subject of an ongoing legal proceeding,” GNPD said.
Meralco said its second EPSA with GNPD has an implemented rate of P8.53 per kWh. GNPD said this rate already includes line rental costs and value-added tax (VAT).
“While GNPD made an initial offer of 300-MW fixed rate for a new EPSA with [Meralco], it was rejected by the distribution company,” GNPD said.
GNPD’s first 300-MW EPSA with Meralco covered the Dec. 15 to Jan. 25 period for P5.96 per kilowatt-hour (kWh).
Meralco’s move to secure an EPSA aims to partially cover the 670 MW of capacity it lost after the CA indefinitely suspended its power supply deal with SPPC, a unit of SMC Global Power Holdings Corp. The 670-MW with SPPC was agreed upon in 2019 for a period of 10 years at P4.2455 per kWh.
Last year, SMC Global Power sought a temporary rate increase, jointly filed with Meralco, saying that SPPC and another unit San Miguel Energy Corp. incurred a combined loss of P15 billion. The rate increase was meant to recover part or P5 billion of the units’ losses.
The company cited a “change in circumstance” when surging fuel costs breached the price range contemplated during the execution of the contracts with Meralco. However, the Energy Regulatory Commission denied the petition, saying this had no basis as the PSA is a fixed-rate contract. — Ashley Erika O. Jose
