Manila Electric Co., the country’s biggest power retailer, signed separate supply agreements with Toledo Power Corp. and Panay Power Corp. to secure its requirements during the dry months.
“After the conduct of a competitive selection process, Meralco signed today, January 22, 2016, two separate interim power supply agreements with Toledo and Panay Power,” Meralco said in a disclosure.
Toledo Power will supply Meralco up to 28 MW [on a firm basis] from 10:00 a.m. to 9:00 p.m. Monday to Saturdays, while Panay Power will sell up to 45 MW from 10 a.m. to 9 a.m. Mondays to Saturday.
The interim supply power agreements will become effective upon provisional or final approval of the Energy Regulatory Commission, and expire on February 25, 2017, unless terminated earlier or extended.
“The IPSAs were entered into to address the company’s capacity requirement arising during the summer months and from scheduled maintenance shutdowns or forced plant outages from its contracted generating plants to mitigate it’s exposure to the Wholesale Electricity Spot Market,” the company said.
WESM is the country’s trading floor of electricity, where distributors are exposed to volatile prices as demand and supply drive power costs.
Meralco last week signed an interim power supply agreement with 1590 Energy Corp., a unit of listed Vivant Corp., to purchase 170 megawatts of firm capacity from its Bauang power plant from February to July this year.
1590 Energy, which owns and manages the output of the 225-MW Bauang bunker-fired power plant in Bauang, La Union, will supply Meralco with 170 MW of firm capacity from 10 a.m. To 9 p.m. from Mondays to Saturdays from February 26 to July 25, 2016.
The agreement also covers up to 170 MW of non-firm capacity from 10 a.m. To 9 p.m. Mondays to Saturdays from July 26, 2016 to February 25, 2017.
Power demand historically shootd up during the dry months due to the warmer weather.
Meralco in December issued invitation for a price challenge for the offers it received from three power companies, including 170 MW from 1590 Energy.
Meralco also published the auction it received from Toledo Power for 28 MW and Panay Power for 45 MW in December.
The price challenge invitation is part of Meralco’s compliance to the controversial competitive selection process, which was recently made mandatory by the Energy Regulatory Commission.
ERC last month directed all distribution utilities to conduct mandatory CSP in the procurement of their supply to the captive market.