Sunday, December 19, 2010

Meralco seeks ERC approval of contract with BacaValley

By Amy R. Remo
Philippine Daily Inquirer
First Posted 22:16:00 12/19/2010

MANILA, Philippines—Manila Electric Co., the country’s biggest power distributor, has sought government approval of its power-supply contract with BacaValley Energy Inc.

Meralco said the agreement would help protect its customers from the volatile power prices at the wholesale electricity spot market (WESM).

“It must be emphasized that the contract for the supply of electricity (CSE), aside from allowing applicant Meralco to take clean energy at lower cost, offers certain benefits to its customers. For one, it will reduce the dependence of Meralco in sourcing its power requirements from the WESM, thereby protecting its customers from the price volatility in the WESM,” the two companies said in a filing with the Energy Regulatory Commission.

Bacavalley Energy operates the San Pedro Methane power plant, which is fueled by methane extracted from the San Pedro landfill.

According to Meralco COO Oscar Reyes, the agreement will allow the distribution utility to purchase all the power to be generated by the power facility.

BacaValley can produce 4 megawatts, Reyes said in a text message to the Inquirer.

Reyes added that once approved by the regulator, this agreement between Meralco and Bacavalley would be the second involving electricity from a methane facility—the first being the Montalban methane power plant, which supplies 11 MW to the power distributor.

Meralco and Bacavalley signed the contract last month under a take-and-pay arrangement, under which the buyer has to accept all deliveries by the seller.

On top of the immediate benefits to Meralco customers, the CSE is also seen to encourage and stimulate the development of renewable energy sources in the country.

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