ERC to dismiss 3 power supply agreements of Meralco

Danessa Rivera (The Philippine Star) - June 4, 2018 - 12:00am

https://www.philstar.com/business/2018/06/04/1821292/erc-dismiss-3-power-supply-agreements-meralco

MANILA, Philippines — The Energy Regulatory Commission (ERC) will have to dismiss three of the power supply agreements (PSAs) of Manila Electric Co. (Meralco) unless environmental compliance certificates (ECCs) are secured within the month, its top official said.

ERC chairman and chief executive officer Agnes Devanadera said the commission has issued an order to the companies involved in three Meralco PSAs to get ECCs.

“We have issued an order for the cases without ECCs for them to comply within 60 days and the 60th day will be June. Otherwise we will have to deal with it most likely dismissal,” she said.

Three PSAs, namely contracts with Central Luzon Premiere Power Corp. (CLPPC) and Mariveles Power Generation Corp. (MPGC) of the San Miguel Group, and Global Luzon Energy Development Corp. (GLEDC) of Global Business Power Corp. still lack ECCs.

CLPPC and MPGC will each build a 4x150-MW circulating fluidized bed coal-fired power generating facility in Pagbilao, Quezon and Mariveles, Bataan which are scheduled to start operations no later than 2021 and 2020, respectively.

GLEDC, on the other hand, intends to build a 2x335-MW coal-fired power generating facility in Barangay Luna, La Union, which is scheduled to become operational by 2022.

Under the PSAs, Meralco will purchase up to 528 MW of capacity from the San Miguel power plants and up to 600 MW from GLEDC.

Devanadera said the ERC would start deliberating on their respective PSAs once ECCs are secured from the Department of Environment and Natural Resources (DENR).

“If they don’t have ECCs yet, we will dismiss the cases. If they secure the ECCs, then the process will start,” she said.

Out of the seven PSAs, Meralco’s contract with Panay Energy Development Corp. (PEDC) was given provisional authority in July 2016.

The other three are with Redondo Peninsula Energy Inc. (RP Energy), St. Raphael Power Generation Corp. (SRPGC) and Atimonan One Energy Inc. – all of which are projects of Meralco subsidiary Meralco Powergen Corp. (MGen) –are still currently undergoing procedural processes.

Meralco is still hoping the three PSAs will be approved by the ERC, however, the retirement of two commissioners in July could potentially delay the approval further.

“I believe the retirement of the two commissioners is with certainty in July, of course, we are hopeful that those that will be appointed are grounded on the power industry, if possible practitioners so that the learning curve will not be as long,” Meralco first vice president and regulatory management head Ivanna dela Peña said.

“We are hopeful, first there should be a quorum, otherwise there will be no decisions made and we are hopeful that the transition will be fast and they will be put to speed on the items that will be approved,” she said.

If the PSAs are not approved soon, this could spell higher rates within Meralco’s franchise area, MGen president Rogelio Singson said.

“Definitely, if not decided (by July)…the impact of higher interest, exchange, EPC (engineering, procurement and construction) escalation cost will still have an impact. But we are still hopeful. We have confidence in (ERC) chair Agnes Devanadera’s ability to understand the situation and the importance of meeting those decisions as quickly as possible,” he said.