Manila Electric Co., the country’s biggest power distributor, has signed new long-term power contracts that will cover 2,800 megawatts of the utility’s electricity requirements.
The move is expected to help stabilize Meralco’s rates up to 2019.
Meralco said it was able to secure a long-term power supply under terms that would allow it to set its power rates at levels lower than the current levels.
“In the process, we limit our exposure to volatile and escalating spot market prices,” said company chairman Manuel V. Pangilinan.
According to Meralco, the average blended power rates from both its existing and new power supply contracts are expected to reach P5 per kilowatt-hour (kWh) in the next two years; P5.04 per kWh in 2015; P5.07 per kWH in 2016; P5.08 per kWh in 2017; P5.10 per kWh in 2018; and P5.13 per kWh in 2019.
These rates are lower than the P5.65-per-kWh rate offered under the company’s existing transition supply contracts with state-run National Power Corp. (Napocor).
“We have moderated electricity prices at levels lower than existing rates,” noted Meralco president and CEO Oscar S. Reyes.
Meralco said in a regulatory filing that the signing of these long-term power supply agreements with various power generation companies was an integral part of the company’s strategy to help contain power costs.
One such contract is that with SEM Calaca Power Corp., which took effect in December 2011 and has helped partly offset the effect of higher costs of electricity from the wholesale electricity spot market (WESM). Based on the power supply agreement, SEM Calaca will provide 210 MW to 420MW from its Batangas coal facility to Meralco.
The other agreements signed were for the supply of power from the Ilijan natural gas facility in Batangas, Masinloc coal facility in Quezon, Pagbilao coal plant also in Quezon.
On June 26, Meralco signed a power contract that would allow San Miguel Energy Corp. to supply 200MW to 500MW of power from the Sual coal-fired power plant in Pangasinan to the distribution utility. source
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