ACEN Corp. sent notices to Manila Electric Co. (Meralco) for a change in circumstance (CIC) in its 2019 power supply agreement, seeking to recover about P2.5 billion from the high coal prices in 2022.
Meralco senior vice president and head of regulatory management Jose Ronald Valles said the company received from ACEN CIC notices for the 110-megawatt mid-merit power supply agreement and 200-MW baseload PSA covering the period January to December 2022.
Valles said ACEN calculated the CIC claims at P2.28 billion for the baseload power plant and P329.652 million for the mid-merit power plant.
He said ACEN filed for CIC claims for the 2019 PSAs, citing the steep climb of coal prices in the Newcastle index caused by the Indonesian coal export ban (which continued despite the ban being lifted), exacerbated by the Russia-Ukraine conflict.
Valles said that based on Meralco’s calculations, the total claim should be only around P700 million, limited to the 270-megawatt South Luzon Thermal Energy Corp. coal plant, excluding the costs from third-party generator and the Wholesale Electricity Spot Market, the trading floor of electricity.
“We said we don’t believe that we sourced from these sources and we don’t believe in this huge amount. When we evaluated, we said remove the others because you did not source from there, in particular the WESM, we did not agree for them to source replacement from there. We told them they can only agree to a total claim of P700 million,” he said.
He said Meralco is proposing a staggered six-month recovery amounting to P0.04 per kilowatt-hour to implement the P700 million recovery.
Valles said if ACEN agrees to the computation, Meralco and ACEN will jointly file a motion with the Energy Regulatory Commission.
“We cannot join the filing and they’re on their own. The reason why we’re joining the filing is we want to preserve the PSA. Because remember under the contract, if we don’t agree to file and seek the approval of the ERC for the claim, then they have recourse, which is to terminate the PSA, which is provided for under the contract,” he said
Valles said Meralco does not want to terminate the PSA because they would be forced to secure another contract at a higher cost.