MERALCO still looking for replacement for Sual Supply

MERALCO power lines

The Manila Electric Co. (MERALCO) is still looking for a new supplier following the termination of its power supply agreement (PSA) with Sual Power, Inc. 

In a report by Business World, MERALCO vice president and head of utility economics Lawrence Fernandez said that the replacement contract would need to follow the rules of the Department of Energy (DOE), and the Energy Regulatory Commission (ERC) when seeking emergency PSAs. They would also need to consider the laws of MERALCO’s PSAs when seeking long-term supply. 

Fernandez said that the contract termination with Sual Power contributed to higher generation changes, which resulted in an increase in MERALCO’s overall rates in September.

The MERALCO official said that the loss of a “lower-cost source of power” led to sourcing from more expensive sources, including the spot market. 

In July, the San Miguel Global Power Holdings Corp. terminated its 330-MW PSA with MERALCO following a Court of Appeals ruling. This led MERALCO to partially source its replacement power from the Wholesale Electricity Spot Market (WESM)

Prior to the termination, Sual Power supplied MERALCO at Php 3.90 per kWh, which is cheaper than the average price of Php 5 per kWh from WESM.