Meralco Secures 500MW From Sual

Manila Bulletin

By MYRNA M. VELASCO

June 26, 2012, 5:51pm

MANILA, Philippines --- Given the 10-percent electricity demand  growth forecast for Luzon, power utility giant Manila Electric Company (Meralco) will be securing up to 500 megawatts (MW) capacity from the Sual coal-fired power plant being administered by San Miguel Energy Corporation (SMEC).

Meralco, in its disclosure to the Philippine Stock Exchange (PSE), has stated that its board of directors has authorized company management “to enter into a power supply agreement with SMEC.”

The San Miguel energy subsidiary is the independent power producer administrator (IPPA) for the Sual plant. It has been managing,

selling to off-takers and trading at the Wholesale Electricity Spot Market (WESM) the generated electricity of the coal plant.

According to Meralco, the initial contract capacity for the SMEC’s Sual asset will be 200 megawatts, and will be increased to 500MW by 2013.

It was further gathered that the duration of the supply deal may also be for seven years, similar to the earlier power supply pacts that the utility firm had cornered with other power generators.

This is already the second agreement that Meralco will be having with the San Miguel group – the other had been for the capacity of the 1,200-MW Ilijan natural gas-fired facility.

That deal is with another SMC subsidiary South Premiere Power Corporation (SPPC), the appointed IPPA for the gas-fired asset which is being operated by Korea Electric Power Corporation.

The Ilijan supply deal requires Meralco to procure the agreed volumes from the plant’s generated capacity until December 25, 2019.

Aside from SMEC, the country’s biggest power distribution firm also secured supply contracts with the plant operators of the Calaca and Masinloc coal-fired plants. All deals are pending for approval by the Energy Regulatory Commission.

The utility firm already opted to source its own power supply given the much-anticipated expiration of its transition supply contract (TSC) with state-run National Power Corporation/Power Sector Assets and Liabilities Management Corporation (PSALM) by December this year.   source