ERC skeds hearing for MERALCO, San Miguel’s 170MW PSA

ERC – Meralco – SMC

The Energy Regulatory Commission (ERC) has scheduled a public hearing on the 170-megawatt (MW) power supply agreement (PSA) between the Manila Electric Company (MERALCO) and SMC Global Power Holdings – the power arm of San Miguel Corporation (SMC).

Both parties that the public hearings for the PSA application will be on May 6 and 13, which is before and after the presidential elections on May 9, respectively. The 170MW peaking power contract was supposed to run from February 26 to July 25. 

MERALCO particularly awarded the PSA to SMC Global Power subsidiary South Premiere Power Corporation (SPPC) in early February.

“The MERALCO-SPPC capacity is crucial for MERALCO’s supply requirement because of the anticipated thinning electricity operating margins leading up to the May 2022 elections, especially with the upcoming simultaneous scheduled maintenance and possible forced outages of the power plants,” the two firms’ joint application read. 

MERALCO added that “the delivered rate of Php 6.5398 per kilowatt-hour (kWh) is lower by about Php 1.0016 per kWh than the effective cost of Php 7.5414 per kWh.”

The power giant emphasized that the approval of the PSA can help shield its customers from the looming supply deficiency as SPPC could provide 100% supply for 12 hours on a daily basis, which covers MERALCO’s peak hours. 

Both firms asserted that a decision by the ERC will “avert the situation where MERALCO would be constrained to source its capacity deficits from the Wholesale Electricity Spot Market,” which in turn would expose the power giant’s customers to volatile power prices. 

Electricity is vital, not only in the voting itself, but also in the transmission and canvassing of votes.

The National Grid Corporation of the Philippines has pointed out the possibility of the first two weeks of May, which includes election day, being sandwiched by Yellow Alerts, particularly in Luzon.