October 17, 2024 | 12:00am
MANILA, Philippines — Close to eight million customers of Manila Electric Co. (Meralco) could expect P11.76 billion in cost savings from the procurement of 600-megawatt (MW) baseload supply starting next year.
Based on its power situation outlook for the third quarter of 2025, the power distribution giant is seeing a baseload capacity deficit of 600 MW in its portfolio.
As such, Meralco conducted a competitive selection process (CSP) covering 15-year power supply agreements (PSAs) effective September next year to ensure reliable and uninterruptible electric service to its consumers.
After offering the lowest bid, San Miguel-led Masinloc Power Co. Ltd. secured 500 MW of the total required contract capacity at a rate of P5.6015 per kilowatt-hour (kWh).
Aboitiz Power Corp.’s GNPower Dinginin Ltd. Co. (GNPD), meanwhile, grabbed the remaining 100-MW baseload requirement for P5.7392 per kWh.
In a joint filing to the Energy Regulatory Commission (ERC) for provisional authority and interim relief, Meralco and Masinloc Power said their PSA could result in savings to consumers of about P9.95 billion.
By sourcing the 500-MW capacity through the PSA instead of the power spot market, Meralco’s average blended generation rate will be reduced by P0.2508 per kWh.
“The Meralco-Masinloc Power PSA can help shield Meralco’s customers from the looming supply deficiency because the supply availability under the PSA is guaranteed 100 percent and no outage allowance is provided therein,” the document stated.
Meanwhile, Meralco and GNPD estimated a cost saving of P1.81 billion from he 100-MW supply deal, with Meralco’s average blended generation rate edging lower by P0.0455 per kWh.
Earlier, Meralco said the conduct of the CSP is in line with its continuing efforts to ensure the availability of reliable, sufficient and cost-competitive power for its customers.
As a highly regulated entity, the company held the auction round in strict compliance with the rules and regulations set by the ERC and the Department of Energy.
Meralco is the largest electric power distribution company in the country, providing electric service within its franchise coverage, which includes Metro Manila and nearby provinces.
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