Power retailer Manila Electric Co. said Wednesday it executed an emergency power supply agreement with South Premiere Power Corp., a unit of San Miguel Power Holdings, for the supply of a 300-megawatt baseload capacity from March 26, 2023 to March 25, 2024.
“The execution of the EPSA will help shield electricity consumers from volatile and potentially higher generation costs in the Wholesale Electricity Spot Market, which is historically recorded during the dry season when power demand spikes,” Meralco said in a statement.
The EPSA partially replaces the capacity covered by Meralco’s 2019 PSA with SPPC, which was subjected to a writ of preliminary injunction issued by the Court of Appeals.
San Miguel Power Holdings is the energy arm of conglomerate San Miguel Corp.
SPPC sought a temporary increase in its rates under the 2019 PSA with Meralco, but it was rejected by the Energy Regulatory Commission.
It elevated the matter to the CA where it was granted a 60-temporary restraining order and recently a WPI.
SPPC ceased supplying to Meralco under the 2019 PSA starting Dec. 7, 2022. This prompted Meralco to ask the Department of Energy an exemption from the competitive selection process to look for other suppliers.
The EPSA reflects a two-part tariff composed of a P1.75 per kilowatt-hour fixed cost and variable cost indexed on fuel price movements.
Meanwhile, Meralco also sought the DOE’s approval for another EPSA for its 180-MW baseload capacity requirement to boost available supply for the dry months.
The 180-MW supply was originally subjected to two rounds of CSPs, which both failed due to lack of bidders.
“Meralco remains committed to its mandate to deliver stable, reliable and least-cost supply to its 7.6 million customers and unceasingly works to mitigate any impact of challenging circumstances on its power rates,” Meralco said.
Meralco was also negotiating an EPSA with Aboitiz Power Corp. for 370 MW of supply which did not materialize. The power retailer is also studying its options on the decision of SMC to terminate its 2021 power supply contracts.
SMC Miguel Power Holdings Inc. decided to terminate its power supply agreements with Meralco totaling 1,800 MW that was supposed to be delivered starting 2024 and 2025.
Meralco is preparing to hold another CSP for the 1,800 MW of capacity for 2024 to 2025 supply months.