The Manila Electric Company (MERALCO) is in talks with government-owned Power Sector Assets and Liabilities Management Corporation (PSALM) for possible supply as the power giant is forced to look for other options for emergency procurement after the Department of Energy (DOE) denied its request to extend its interim power supply agreement (IPSA).
Energy Usec. Felix William Fuentebella said the DOE denied MERALCO’s emergency procurement of up to 260 megawatts (MW), originally intended to address supply issues until summer next year. These issues include the Malampaya shutdown in October and the 2022 elections.
Fuentebella indicated at a congressional hearing in late July that MERALCO’s petition would be denied on grounds that it wouldn’t address the said concerns.
He added that the agency did not receive any motion for reconsideration, as the power distributor opted for another way of getting emergency supply.
The DOE then advised MERALCO that it can ask what PSALM could offer given that it already has the rates as pre-approved by the Energy Regulatory Commission.
Based on a report by The Philippine Star, MERALCO confirmed that it is in talks with PSALM, but the state-run firm has yet to comment.
The IPSA originated from the power supply deal the utility giant inked with San Miguel Corporation-owned Masinloc Power Partners Co. Ltd. (MPPCL) back in 2019. The agreement, which covered 220MW, lapsed this year.
Under the IPSA, MERALCO proposed to increase the supply from MPPCL to 260MW. It is priced at Php6.9161 per kilowatt-hour (kWh), significantly lower than the peak price of Php16/kWh in the Wholesale Electricity Spot Market.