With the plan to recover around Php 2.5 billion from the increased coal prices in 2022, ACEN Corporation has issued a notice to Manila Electric Company (MERALCO) seeking a change in circumstance (CIC) in its signed 2019 power supply agreement (PSA).
MERALCO Senior Vice President and Head of Regulatory Management Jose Ronald Valles said the distribution utility received CIC notices for the 110-megawatt (MW) mid-merit power supply agreement and 200-MW baseload PSA from January to December 2022.
Valles provided additional details, specifying that ACEN’s calculation of the CIC encompassed roughly Php 2.28 billion for the baseload power plant and Php 329.652 million for the mid-merit power plant.
These CIC claims for the 2019 PSAs were due to the rapid surge in coal prices in the Newcastle index, due to the Indonesian coal export ban and worsened by the Russia-Ukraine conflict.
However, Valles cleared that based on the distribution utility’s calculations, the claim only reached around Php 700 million, limited to the 270 MW South Luzon Thermal Energy Corporation.
This calculation ruled out the costs from third-party generators as well as the Wholesale Electricity Spot Market.
To carry out the Php 700 million recovery, MERALCO proposed a six-month recovery, offering Php 0.04 per kilowatt-hour (kWh).
Should ACEN agree to the agreement, the two firms would file a motion to the Energy Regulatory Commission.
MERALCO stressed that they did not want to terminate the PSA because that would mean another contract but with an increase in the cost.
