Meralco has countered recent claims by the Department of Energy (DOE) that its Power Supply Agreement (PSA) with Excellent Energy Resources Inc. (EERI) is driving up electricity prices. The utility attributes high Wholesale Electricity Spot Market (WESM) prices to grid supply shortages and regulatory delays, not its competitive selection process (CSP).
On April 14, DOE Assistant Secretary Mario Marasigan suggested Meralco’s delayed 1,200 MW EERI PSA, a winner of last year’s 1,800 MW CSP, was inflating WESM prices.
Meralco responded, “The points raised by DOE Assistant Secretary Mario Marasigan… are utterly untrue.” In a statement released today, the Philippines’ largest power distributor clarified that price spikes result from outages of aging power plants, not EERI’s delay. The PSA ensures customers pay “the lower of the actual cost of the replacement power and the PSA rate approved by the Energy Regulatory Commission (ERC).”
Meralco pointed out Luzon grid’s lack of new baseload power since 2002, except for EERI and GNPD, another CSP winner.
“Most of the new capacities in the grid are solar technologies which become unavailable during evening thereby further driving up the WESM spot prices,” the company said. It emphasized that its CSP follows DOE and ERC rules, with EERI and South Premiere Power Corp. (SPPC) securing the lowest tariffs last year.
Regulatory delays at the ERC exacerbate supply issues, Meralco noted. EERI’s PSA, approved on December 18, 2024, began testing by November 26, 2024, delivering “commissioning energy at lower rate than the PSA price.”
Other PSAs, including 350 MW of renewable energy from San Roque Hydropower, Inc. and Gigasol3, await ERC approval, leaving customers vulnerable to WESM volatility.
As summer demand approaches, Meralco reaffirmed its commitment to reliable service and called for more power plants and faster regulatory approvals to stabilize prices.
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