By Sheldeen Joy Talavera, Reporter
THE Energy Regulatory Commission (ERC) has approved Manila Electric Co.’s (Meralco) power supply agreements (PSAs) with San Miguel Global Power Corp. (SMGP) and ACEN Corp. at rates higher than the provisional P5.1908 per kilowatt-hour (kWh), securing 479 megawatts (MW) of renewable capacity but signaling higher costs for consumers.
“The final decision that we rendered, we based it on the applied rates and the rationale being that this was already the product of the competitive selection process,” ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said on the sidelines of an energy forum organized by the Economic Journalists Association of the Philippines on Thursday.
Under Mr. Juan’s leadership, the ERC approved the original rates under Meralco’s PSAs with SMGP’s San Roque Hydropower, Inc. (SRHI) and ACEN’s Gigasol 3, Inc., covering a total supply of 479 MW.
SRHI and Gigasol 3 were among the winning bidders in Meralco’s competitive selection process last year for its 500-MW renewable energy supply requirement.
SRHI offered a rate of P7.10 per kWh for 340 MW, while Gigasol 3 submitted P8.1819 per kWh for 139 MW. The supply deals were set to take effect on Feb. 26 this year.
The ERC had granted provisional authority last year to implement the PSAs at a fixed rate of P5.1908 per kWh, lower than the companies’ proposed rates.
SRHI subsequently sought reconsideration over the ERC’s decision, which imposed a different rate and limited the sourcing of contracted capacity to eligible renewable energy facilities.
Meralco said the potential termination of its contracts would affect not only its ability to ensure continuous and reliable electricity for consumers but also its compliance with the Renewable Portfolio Standards.
“If [Meralco] would not be able to implement this mid-merit supply coming from these two generation companies, it will be forced to buy from the RE market which could be an additional cost on the part of Meralco,” Mr. Juan said.
The ERC chief added that the commission is working to streamline the resolution of PSA applications resulting from the competitive selection processes conducted by distribution utilities and power suppliers.
“We are acting with extreme urgency right now…We understand that timeliness of our decision, many are dependents, such as the generator and distribution utility that will need supply,” Mr. Juan said.
For the September electricity billing, Meralco slashed power rates by P0.1852 per kWh to P13.0851 per kWh, mainly due to lower generation charge.
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.
