ERC nods on MERALCO, SPPC 910MW power deal

ERC approves Mindanao transmission backbone project

Manila Electric Company (MERALCO) has secured regulatory approval to source power from the 1,200-megawatt (MW) Ilijan natural gas plant operated by South Premiere Power Corporation (SPPC), a subsidiary of San Miguel Global Power Holdings Corp.

In a report by Philippine Star, the Energy Regulatory Commission (ERC) awarded provisional authority (PA) for the power supply agreement (PSA) between MERALCO and SPPC, permitting the distribution utility to acquire 910 MW at a base rate of Php 5.9282 per kilowatt-hour (kWh).

The ERC explained that the PA issuance would protect MERALCO consumers from volatile prices in the Wholesale Electricity Spot Market (WESM) and replace higher-priced volumes contracted by the Distribution Utility (DU) firm from the Ilijan plant.

Additionally, the commission’s simulations indicate that the DU’s blended generation rate could decrease by Php 0.2828 per kWh, pending adjustments after the ERC’s final deliberation on the PSA.

MERALCO had awarded SPPC 890 MW to 1,200 MW of capacity under the PSA. However, about 290 MW is tied to a previous contract authorized by the commission.

In response, the ERC instructed the parties to uphold the existing contract and its lower rate for the 290 MW capacity.

Furthermore, the ERC also mandated that the firms provide proof that no capacity or electrical output within the contract capacity would be contracted under a separate agreement for the duration of the PSA, starting December 26, 2023.

Earlier this year, MERALCO and SPPC jointly applied to the ERC for their power supply deal.

During a competitive selection process, MERALCO declared SPPC the winning bidder and awarded a PSA for a total supply capacity of 1,200 MW at an offered rate of Php 7.0718 per kWh.