By Alena Mae S. Flores
The Energy Regulatory Commission asked Panay Energy Development Corp., owner of two coal-fired power plants in Iloilo City, to explain its fuel losses amounting to P1.4 billion which prompted its decision to stop supplying electricity to Manila Electric Co. effective Dec. 5, 2022.
It issued an order on Jan. 25, 2023 directing PEDC and Meralco to file pertinent documents and explanation to support their application for the termination of their power supply agreement dated Nov. 29, 2021.
PEDC submitted the lowest bid for the supply of 70 MW to Meralco in a bidding held in November 2021. It offered the lowest total headline rate of P2.9906 per kilowatt-hour and total levelized cost of electricity rate of PP2.948 per kWh.
PEDC owns and operates a 164-megawatt coal-fired facility and another 150-MW coal-fired power plant in Iloilo City that utilize circulating fluidized bed boiler technology.
PEDC said it suffered from losses amid the unprecedented increase in coal prices.
The ERC asked the parties to submit the documents on how the P962.2-million fuel loss from April to September 2022 was derived. It asked PEDC for the computation and supporting documents of the alleged losses as contained in Meralco’s manifestation dated Dec. 9. 2022.
The regulator also asked for a rate impact analysis of the blended generation rate of Meralco on the alleged fuel losses of PEDC and a rate impact analysis if Meralco would source from the Wholesale Electricity Spot Market and other generation companies instead of PEDC.
It also ordered the parties to submit the proposed recovery scheme for the actual fuel losses.
The ERC said the parties should explain whether the assumed fuel cost of P2.4104 per kWh, as bidded out in the competitive selection process, included the freight costs and foreign exchange costs.
It directed PEDC to submit an audited financial statement showing the impact of the PSA and other documents showing the said impact.