MANILA, Philippines — Manila Electric Co. (Meralco) has secured regulatory approval to get power supply from the 1,200-megawatt (MW) Ilijan natural gas plant of San Miguel subsidiary South Premiere Power Corp. (SPPC).
The Energy Regulatory Commission (ERC) has granted provisional authority (PA) for the conduct of the power supply agreement (PSA) between the two firms, with Meralco getting supply of 910 MW at a base rate of P5.9282 per kilowatt-hour (kWh).
The issuance of PA, the ERC said, will “further protect Meralco’s consumers from exposure to volatile prices in the Wholesale Electricity Spot Market and displace volumes contracted by Meralco also from the Ilijan plant at higher prices.”
Following its simulations, the commission found that Meralco’s blended generation rate would be lower by an estimated amount of P0.2828 per kWh, subject to adjustment after the ERC’s deliberation on the PSA’s final authority.
While Meralco awarded 890 MW to 1,200 MW of capacity under the PSA to SPPC, the regulator said that about 290 MW is bound by an earlier contract the commission previously authorized.
“Thus, the commission ordered the parties to continue honoring the subsisting contract and lower rate in respect of the 290 MW capacity,” it said.
The ERC also directed the firms to submit proof of compliance that “from Dec. 26, 2023, and for the duration of the PSA, no capacity and electrical output within the contract capacity shall be contracted under an agreement apart from the resulting PSA of this bidding.”
Earlier this year, Meralco and SPPC jointly filed an application with the ERC for their power supply deal.
The Pangilinan-led power retailer declared SPPC as the winning bidder during a competitive selection process and awarded a PSA for its offer of P7.0718 per kWh for a total supply capacity of 1,200 MW.