MERALCO entering emergency PSAs, new offers for 1000 MW

meralco logo electric post

The Manila Electric Co. (MERALCO) has entered into emergency power supply agreements (EPSA) and seeking new offers to contract  1,000 megawatts (MW) of capacity in case its power supply agreements (PSA) with San Miguel Corporation’s (SMC) power units end.  

This move follows Energy Regulatory Commission’s (ERC) denial of the rate hike petition of MERALCO and SMC Global Power Holdings (SMCGP). 

MERALCO first vice president and head of regulatory management Atty. Jose Ronald Valles said that they have entered into EPSAs and sought offers with other generation companies “to ensure continuity of stable, reliable, and adequate supply to MERALCO customers.” 

This is in case the two PSAs of SMC and MERALCO be terminated following the ERC denial. 

Valles said that in case the supply agreements be terminated, MERALCO will be “constrained to source up to 1,000 MW from the Wholesale Electricity Spot Market (WESM) without prejudice to the resolution of whatever legal remedies MERALCO may pursue against South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) under the PSA.” 

SPPC and SMEC are the independent power producers (IPP) of the 1,200-megawatt (MW) Ilijan power plant, and the 1,200 MW Sual power plant, respectively. The two power plants have 670 MW and 300 MW contracted capacity, respectively, with MERALCO. 

Valles said that MERALCO will exert all remedies to prevent the termination of the PSAs. 

MERALCO is hopeful that the Department of Energy will take action in exempting the EPSAs from undergoing a competitive selection process. Valles said that its customers may be exposed to volatile prices without the EPSAs.