MANILA, Philippines - Manila Electric Co. (Meralco), the country’s biggest power distributor, has signed a power supply agreement with Bacman Geothermal Inc., wholly-owned subsidiary of the Lopez-run Energy Development Corp.
In a disclosure to the Philippine Stock Exchange, Meralco said BGI would supply the power distributor 50 megawatts of power.
“Pursuant to the agreement, BGI shall supply Meralco with 50 MW of power from the Bacman power plants over a term of five years extendable by an additional two years upon mutual agreement of the parties. The agreement shall be submitted to the Energy Regulatory Commission for approval,” Meralco said.
The signing of the contract is part of Meralco’s efforts to contract additional power supply to avert a looming shortage in the summer of 2015.
“The PSA was entered into to address the forecasted supply constraint and mitigate the company’s exposure to the Wholesale Electricity Spot Market during the summer months of 2015 and as part of Meralco’s continuing efforts to source additional capacities through interim bilateral contracts with power producers with available contracted capacity,” it said.
WESM is the country’s trading floor for electricity.
The Department of Energy has said that there is a projected shortage of 700 MW in the Luzon grid in the summer of 2015 comprising of a power deficit of at least 31 MW and contingency reserves – equivalent to the biggest plant in the grid which is the Sual plant in Pangasinan – of 647 MW.