Meralco unit asks ERC to approve power supply agreements soon

MANILA, Philippines – Rogelio Singson, the newly-appointed chief of the power generation unit of the Manila Electric Company (Meralco), called on the Energy Regulatory Commission (ERC) to approve applications for 7 power supply agreements (PSAs) as soon as possible.

“Hopefully with ERC now stabilizing, we can go back to them and really appeal to them because we really need these PSAs as soon as possible so the impact of baseload power that we need will not be delayed,” Meralco PowerGen Corporation (MGen) chief executive officer Singson said last week.

Meralco’s PSAs involve a supply of 3,551 megawatts (MWs), which corner 81% of the combined output of the 7 power plants, Most of these are owned or partly owned by Meralco, through MGen and affiliate Global Business Power Corporation.

These 7 PSAs pending for approval were inked with Redondo Peninsula Energy Incorporated (RP Energy); St Raphael Power Generation Corporation (SRPGC); Atimonan One Energy Incorporated (A1EI); MGen Panay Energy Development Corporation (PEDC); Global Luzon Energy Development Corporation (GLEDC); Central Luzon Premiere Power Corporation (CLPPC); and Mariveles Power Generation Corporation (MPGC).

The PSA applications were filed in 2016. (READ: ERC urged to reject Meralco’s 7 coal power plants)

The ERC earlier said the PSAs are still being evaluated to ensure that only “just and reasonable costs” will be included in electricity bills.

“We are carefully scrutinizing each of the cost components in the Meralco PSA applications that is why the final approval of these applications have been taking some time,” ERC Officer-in-Charge Alfredo Non had said. 

The ERC’s PSA approval entails a hearing process, filing of formal offer of evidence, technical evaluation, commission deliberation, and issuance of a decision.

ERC Commissioner Josefina Patricia Asirit said early this month that the agency is “hopeful” it can decide on 3 of the 7 PSAs within the year.

“Yes. It’s still long before 2017 ends. Hopefully, barring any other complications, we should be able to consider a lot of the issues that have been put forth on the applications put before us,” said Asirit.

Of the 7 applications, 3 “have not been heard yet” while one was issued a provisional authority (PA).

The remaining 3 applications are “in different stages,” said Asirit. (READ: Meralco’s profit flat due to impact of temperature, currency, inflation)

“There is one that was issued provisional approval only because there was the ability to benchmark. It’s not a greenfield plant and it was necessary for the same to be addressed as an interim measure to meet demand requirements in a particular period and that’s the PEDC contract,” added Asirit.

The PA that was granted to PEDC in July 2016 was needed in view of the frequent yellow alert status of power reserves at that time.  

“We must remember that stable supply of power is among the anchors of our economy,” Non said.

“We granted the provisional approval because it will be more beneficial to the consuming public, and the country as a whole, to have a continuing stable power supply than have rotating brownouts which is more damaging to the economy.” – Rappler.com