MANILA Electric Co. (Meralco) has secured another 300-megawatt (MW) emergency power supply to partly cover its 670-MW deal with a unit of SMC Global Power Holdings Corp. that remains suspended.
“Out of the 670-MW supply that we lost from SPPC (South Premiere Power Corp.), we have secured another 300 MW that will last until Feb. 25. Hopefully, that will help augment the supply that we badly needed and manage somehow the costs,” Joe R. Zaldarriaga, Meralco’s spokesperson and head of corporate communications, said in a media briefing last week.
The emergency power supply agreement (EPSA) was secured on Feb. 3 with Aboitiz Power Corp.’s GNPower Dinginin Ltd. Co. (GNPD).
“Following the expiration of its contract with GNPD, Meralco executed another EPSA with the generation company for the supply of 300-MW baseload capacity,” Meralco said in a separate statement.
However, Meralco said its new EPSA with GNPD is not a fixed-rate contract.
“The EPSA lessens Meralco’s exposure to the Wholesale Electricity Spot Market (WESM) and in turn, shields its customers from volatile and potentially higher generation costs,” the power distributor said.
Mr. Zaldarriaga said the remaining 370 MW will be sourced from the spot market.
Meralco said the contract forms part of its efforts to ensure sufficient supply and manage electricity rates as a result of the cessation of the supply covered by its power supply agreement with SPPC. The deal was subjected to a writ of preliminary injunction issued by the Court of Appeals.
In December, Meralco secured an EPSA for 300 MW with AboitizPower for a rate of P5.96 per kilowatt-hour (kWh) from Dec. 15, 2022 until Jan. 25, 2023. The power was sourced from AboitizPower’s power plant under GNPD.
The 670-MW capacity is supposed to be covered by Meralco’s PSA with SPPC, which was agreed upon in 2019 for a period of 10 years at P4.2455 per kWh. However, the deal was indefinitely suspended after the injunction issued by the appellate court in January.
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 ERC denied the petition, saying this had no basis as the PSA is a fixed-rate contract.
Meanwhile, Meralco said that it is crucial to secure a new EPSA as the Malampaya gas field is under maintenance shutdown from Feb. 4 to 18.
Meanwhile, Meralco said the overall rate for a typical household decreased by P0.0106 per kWh to P10.8895 per kWh in February, from P10.9001 per kWh in January due to a lower generation charge.
Households that consume 200 kWh would see their monthly bills decline by P2.13, while those consuming 300 kWh will see their bills go down by P2.71 in February.
Residential customers consuming 400 kWh and 500 kWh will see their monthly bills decline by P3.04 and P2.39, respectively.
The power distributor said the generation charge went down by P0.2137 to P6.9154 per kWh from P7.1291 per kWh a month ago due to lower costs from WESM and independent power producers (IPPs).
Meralco said WESM charges declined by P3.7370 per kWh due to the improved Luzon power grid situation as power demand also decreased.
Meralco added that the secondary price cap, a preventive mitigating measure to avoid excessively high electricity prices, was not triggered in January for the first time since October 2021.
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