The Energy Regulatory Commission (ERC) stopped three power suppliers from unilaterally terminating their power supply agreements (PSAs) with Manila Electric Co. (Meralco).
The ERC said the suppliers couldn’t terminate the PSAs based on the longstop date.
Meralco is seeking ERC approval for 15-year PSAs with GNPower Dinginin Ltd. Co. (GNPD), Mariveles Power Generation Corp. (MPGC) and Excellent Energy Resources Inc. (EERI). The PSAs have scheduled commercial operations dates no later than April 26, 2025 for MPGC and GNPD (300 megawatts each) and Nov. 26, 2024, for EERI (1,200 megawatts).
Under the PSAs, the suppliers could terminate without notice if the ERC didn’t approve them by the longstop date. The ERC said this stipulation was inconsistent with relevant laws and regulations.
The ERC said the suppliers’ unilateral termination rights were incompatible with the Energy Virtual One-Stop Shop Act (EVOSS Act) and its implementing rules. Any termination within the PSA’s validity period would require the ERC’s prior approval, it said.
The ERC said that based on its review of the three PSAs, the parties did not include in their application any prayer for provisional authority, which the commission is duty-bound to act upon within 75 days from filing.
“The timeline applicable for the action of the commission shall be 270 calendar days from the filing as provided under the Energy Virtual One-Stop Shop [EVOSS Act],” the ERC said.
The regulator also said the competitive selection process guidelines provides that no party to the PSA would be allowed to terminate the contract within the validity period unless allowed under certain guidelines.
“The commission finds that the stipulation contained in the PSA, as to the termination based on the non-occurrence of the commission’s final approval of the instant joint application on or before the longstop date must still comply with the relevant laws and regulations, specifically the EVOSS Act, its implementing rules and regulations and the 2023 CSP guidelines,” the ERC said.
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