Meralco inks another power supply contract for summer

MANILA, Philippines – Power distributor Manila Electric Company (Meralco) inked another Interim Power Supply Agreement (IPSA) with a generation company to minimize its exposure to Wholesale Electricity Spot Market (WESM) this summer.

On Thursday, April 10, Meralco said it signed an IPSA with PanAsia Energy Inc. for the purchase of up to a maximum of 270 megwatts (MW) capacity from the company for the months April to June.

The IPSA will take effect once approved by the Energy Regulatory Commission.

Meralco signed early this month IPSAs with Toledo Power Company for the purchase of up to 37 MW capacity, and Panay Power Corporation for up to 27 MW. It also signed a contract with 1590 Energy Corporation for up to 140 MW capacity from the latter’s Bauang power plant. The contracts will expire on June 30 unless renewed or extended.

Meralco is contracting additional power to lessen its exposure to WESM, where electricity prices usually go up during summer because of high demand.

The company raised its rates by P0.89 per kilowatt-hour (kWh) this April, citing increases in almost all components of the electricity bill.

Bulk of the increase was accounted for by the generation charge – P0.60/kWh. This charge went up on higher cost of power purchased under supply agreements and from WESM.

WESM prices increased to P21.59/kWh during the March supply month from P4.90/kWh the previous month. Higher demand and tight supply brought about by the outage of several power plants caused the increase. – Rappler.com