Following the termination of a 330 megawatt (MW) power supply agreement (PSA) due to the recent verdict of the Court of Appeals, South Premiere Power Corporation (SPPC), a subsidiary of SMC Global Power Holdings Corporation, is offering another power supply deal to the Manila Electric Company (MERALCO).
In a report by the Manila Bulletin, MERALCO First Vice President and Regulatory Head Jose Ronald Valles that SPPC offered a 300 MW supply from its Ilijan plant which now operates on liquefied natural gas (LNG).
This new offer would replace the 330-MW priced contract the SMC had from supplying Sual coal-fired power plant that was terminated.
MERALCO sought approval for an emergency power supply agreement (EPSA) that would be in effect from August 26, 2023, until March 25, 2024, pending approval from the Energy Regulatory Commission (ERC).
Valles added that the company quickly considered a replacement from different suppliers but most of them declined, except for SMC.
SMC’s latest offer is set at Php 1.75 per kilowatt-hour (kWh) for the fixed cost component, with the fuel pass-through indexed to the Platt JKM (Japan Korea Marker) LNG pricing.
Valles said that if ERC gives the green light, then it could be implemented immediately and added to the 480 MW that was already carried out, which will have a term of until March 2024.
He added that the only nominated power plant is SPPC, which will run on LNG. In June of this year, Ilijan commenced its operation following the receipt of its first LNG shipment.
A legal battle occurred after ERC scrapped the petition of SPPC and San Miguel Energy Corporation (SMEC) to increase their rate which would have allowed the company to recover fuel costs spanning six months after the sudden spike in fuel due to the Russian-Ukraine war.