By
Lenie Lectura - October 25, 2017
THE Manila
Electric Co. (Meralco) and Solar Philippines Tarlac Corp. (SPTC) are seeking
regulatory approval to implement their power supply agreement (PSA). The two
claim that the timely implementation of the signed agreement will “best serve
the interests” of consumers.
Under the PSA, SPTC
will supply Meralco 75 megawatts (MW) to 85 MW for five years and another 85 MW
from the sixth up to the 20th year for P2.9999 per kilowatt-hour (kWh). This
rate is significantly lower than the prevailing solar feed-in-tariff (FiT)
rates. For one, the simulated delivered price under the PSA would be P3.099 per
kWh, significantly lower than the prevailing FiT rates and the lowest tariff
offer that Meralco has received for a solar technology. This will result in a
reduction of Meralco’s generation charge by about P0.0033 per kWh.
“The simulated
delivered price of P3.099 per kWh provides for a much lower cost of power
compared to the simulated effective cost at the Wholesale Electricity Spot
Market (WESM) of P3.8524, thereby resulting in savings to the consumers of
about P0.7525 per kWh,” an 18-page application filed before the Energy
Regulatory Commission (ERC) said.
The two firms claim
that if implemented, the PSA would also contribute to the government initiative
of encouraging the development of renewable energy (RE) in the country.
“The commission’s
approval of the PSA will send strong signals to renewable or solar
energy-generation projects in the Philippines and, thus, set the pace for
infusion of similar investments by the private sector,” Meralco and SPTC said.
Meralco said it needs
to source additional peaking capacity through bilateral power supply contracts
to ensure its customers of continuous and reliable electricity.
Based on the power
situation outlook for 2017 and succeeding years, Meralco foresees a peaking
capacity deficit in its portfolio due to the expected high demand, as well as possible
occurrences of scheduled maintenance shutdowns and forced outage of power
plants. Based on its distribution development plan for the period 2015-2024,
Meralco’s aggregate capacity requirement is forecasted to grow by a compounded
average growth rate of 3.7 percent.
“It bears emphasis that
based on Meralco’s foreseen peaking capacity deficit, there is an urgent need
for the provisional approval of the PSA,” the application said. The firms also
asked the ERC that “after hearing on the merits, render a decision approving
the PSA between Meralco and SPTC.”
SPTC is building and
shall own, operate, manage and maintain a solar-power plant capable of
supplying up to 85 MW, which is located in the municipality of Concepcion,
Tarlac.
“Considering that
SPTC’s solar-power plant is expected to achieve commercial operations in the
fourth quarter of 2017, an immediate implementation of the PSA would redound to
the benefit of the consumers in terms of environmental benefits,” they added.
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