Meralco to renew interim power supply agreements

MANILA, Philippines – Power distributor Manila Electric Company (Meralco) will renew its interim power supply agreements (IPSAs) with generation companies to ensure no interruption in supply.

This comes amid the expected tightening of power supply in Luzon due to the maintenance shutdown of several major power plants.

Under the IPSAs, Meralco will be assured output from suppliers, helping reduce its purchases from the Wholesale Electricity Spot Market (WESM). 

Meralco Senior Vice President for Customer Retail Services Alfredo Panlilio said the company would renew the IPSAs for the benefit of its customers.

“The extension is due to the projected demand and taking into account scheduled outages of certain power plants these next few months,” Panlilio said.

The power distributor is set to renew its IPSAs with Global Business Power Corporation (GBPC), 1590 Energy Corporation, and Panasia Energy. The agreements with these companies will end on June 30.

Meralco signed a contract with GBPC for the purchase of up to 64 megawatts (MW) from Toledo Power Company and Panay Power Corporation.

The firm also signed an agreement with 1590 Energy Corporation for up to 140 MW from the Bauang diesel power plant in La Union.

Panlilio said the IPSAs with GBPC and 1590 Energy Corporation would be extended until October 31, 2014.

Meanwhile, the agreement with Panasia Energy will be extended until July 31.

The power supply deals are meant to decrease Meralco’s dependence on WESM, given the maintenance shutdown of plants in the next 6 months. The El Niño phenomenon is also expected to decrease the output of hydropower plants, especially when it peaks during the last quarter of the year.

In its power supply-demand outlook for June to December 2014, the Department of Energy (DOE) said there would be “insufficient available capacity for contingency and dispatchable reserve requirements” in the Luzon grid.

Based on the Grid Operating and Maintenance Program submitted by the National Grid Corporation of the Philippines to regulators, the following plants are scheduled to go offline:

• Pagbilao 1 (375 MW) – offline June 10 to July 9
• Pagbilao 2 (382 MW) – July 16 to August 14
• Sta. Rita Module 20 (250 MW) – September 6 to 20
• Sual 1 (647MW) – September 12 to October 11
• Sual 2 (647MW) – August 16 to September 14
• Sta. Rita Module 40 (250 MW) – February 28 to December 31
• San Lorenzo Module 50 (250MW) – October 25 to 29
• Sta. Rita Module 30 (250 MW) – November 1 to 5
• San Lorenzo Module 60 (250 MW) – November 8 to 12
• Malaya 2 (350 MW) – November 8 to December 23

In all, 3,651 MW of capacity are expected to go offline for the rest of the year.

The Energy Regulatory Commission has extended the implementation of a secondary price cap in the electricity spot market to prevent price spikes. – Rappler.com