The Energy Regulatory Commission granted interim relief to electricity retailer Manila Electric Co. to implement its power supply agreement with Solar Philippines Tanauan Corp.
“The grant herein of an interim relief in favor of applicants Meralco and SPTC will ultimately redound to the benefit of the consumers,” the ERC said in its decision.
Solar Philippines offered to supply Meralco a rate of P5.39 per kilowatt-hour for 20 years. The ERC approved the rate but “not subject to adjustment or escalation.”
Under the supply agreement, Solar philippines will supply 50 megawatts of capacity to Meralco from its solar farms in Tananuan, Batangas and Naic, Cavite.
“The simulated delivered price under the PSA would be P5.59 per kWh, resulting in a reduction of Meralco’s generation charge by about P0.0118 per kW,” the ERC said.
It said Solar Philippines’ application rate was inclusive of the costs associated with the dedicated point-to-point facilities for the two plants, but without prejudice to the evaluation to be made on the point-to-point application by the Commission.
The ERC also said the final generation cost that could be recovered would be determined by the commission in its decision on the application.
“In the event that the final rate is higher than that granted in the interim, the resulting additional charges shall be collected by SPTC from Meralco. If the final rate is lower than that granted in the interim, the amount corresponding to the reduction shall be redounded by SPTC to Meralco,” the regulator said. Alena Mae S. Flores
The parties signed the supply agreement after Meralco failed to receive a price challenge on Solar Philippines’ offer.
Meralco said in its application it sought for a supply agreement with Solar Philippines because it expects a peaking capacity deficit during the summer months when demand is high.