MANILA Electric Co. (Meralco) has secured another emergency power supply agreement (EPSA) for one year with a unit of Aboitiz Power Corp., an official of the electricity distributor said.
“This EPSA [is] intended to mitigate Meralco’s WESM (Wholesale Electricity Spot Market) exposure,” said Jose Ronald V. Valles, Meralco’s first vice-president and head of its regulatory management, in a virtual press briefing on Monday.
Meralco forged the power supply deal with AboitizPower’s Therma Luzon, Inc. for a 370-megawatt (MW) capacity at P8.14 per kilowatt-hour (kWh), Mr. Valles said.
He added that the company had requested for a certificate of exemption from the Department of Energy (DoE) to allow the immediate implementation of the EPSA.
The exemption from the competitive selection process was granted by the DoE and covers 670-MW for the period March 26, 2023 to March 25, 2024. The capacity includes Therma Luzon’s 370 MW and another EPSA being supplied by South Premiere Power Corp. (SPPC) at 300 MW.
Last month, Meralco announced that it had forged an EPSA for one year with SPPC.
Meralco’s EPSA will cover the 670-MW capacity it lost from SPPC, a unit of San Miguel Global Power Holdings Corp. The contract with SPPC was forged in 2019 at P4.2455 per kWh. It was subjected to a writ of preliminary injunction by the Court of Appeals, indefinitely suspending the power supply agreement.
Mr. Valles said Meralco’s EPSA with both parties will end earlier if the court injunction is lifted.
However, in a resolution promulgated on April 3, the appellate court upheld its decision granting an injunction in favor of SPPC, denying the motion for reconsideration filed by Meralco and the Energy Regulatory Commission.
This is not the first time that Meralco forged an EPSA with AboitizPower. Meralco previously signed an EPSA with the company’s GNPower Dinginin Ltd. Co. through a deal forged on Dec. 15, 2022 until Jan. 25, 2023 at a rate of P5.96 per kWh.
The contracting parties agreed on a second EPSA, which was secured on Feb. 3 to last until Feb. 25. The second deal has a full fuel pass-through structure with an implemented rate of P8.53 per kWh.
In 2022, San Miguel 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. But the ERC denied the petition, saying this had no basis as the PSA is a fixed-rate contract.
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 an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose