December 10, 2024 | 12:00am
MANILA, Philippines — The Energy Regulatory Commission (ERC) has given power distributor Manila Electric Co. (Meralco) the go-signal to procure new mid-merit supply from the generation facilities operated by the San Miguel Group and the Zobel family’s ACEN Corp.
The regulator has granted provisional authority to Meralco, San Miguel-led San Roque Hydropower Inc. (SRHI) and ACEN’s Gigasol3 Inc. for their respective power supply agreements (PSAs).
SRHI and Gigasol3, along with another ACEN unit, Santa Cruz Solar Energy Inc. (SCSEI), emerged as the winning bidders during Meralco’s competitive selection process (CSP) for its renewable energy (RE) supply.
The CSP involves a 10-year PSA for Meralco’s 350-megawatt mid-merit requirement starting February next year that will increase by 150 MW by February 2026.
SRHI offered the lowest total headline rate of P7.10 per kilowatt-hour (kWh) for 340 MW of the total requirement.
Gigasol3 submitted a bid price of P8.1819 per kWh for 139 MW, while SCSEI cornered the remaining 21 MW requirement at a rate of P8.1998 per kWh.
The ERC, however, noted the applicable rate for these PSAs “shall be fixed at P5.1908 per kWh, without any escalation or adjustment.”
In a Viber message, ERC chairperson and CEO Monalisa Dimalanta explained that the rates provisionally approved by the commission were based on the average rate of Meralco’s other mid-merit supply contracts.
“We need to further evaluate the higher rates in these PSAs (more than P8 per kWh), as well as the reserve price set by Meralco. These will all be covered in the final authority to be issued after evaluation,” she said.
The country’s power sector watchdog, Dimalanta added, has yet to evaluate the supply deal between Meralco and SCSEI.
Earlier, Meralco said the conduct of the CSP is aligned with continuing efforts to ensure the availability of reliable, sufficient and cost-competitive power for its customers.
To date, Meralco has already contracted at least 1,880 MW of RE capacity from various suppliers, surpassing its initial target of 1,500 MW.
This aligns well with the company’s goal of having renewables account for about 22 percent of its supply portfolio over the next six years.
RE facilities are among the most common types of mid-merit supply sources, typically operating during periods of moderate demand to help bridge the gap between peak and base generation sources.
Meralco is the largest private distribution company in the country, providing electric service to eight million customers within its franchise coverage that includes Metro Manila and nearby provinces.
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