Meralco signs contract to purchase power from Limay plant

Manila Standard Today
By Alena Mae S. Flores | Apr. 11, 2014 at 12:01am

Power distributor Manila Electric Co. has signed a power supply deal with the owner of the Limay diesel power plant in Bataan province to cover the power requirements for the dry season and lessen dependence on the spot market.

Meralco said it signed the interim power supply agreement with PanAsia Energy Inc. for the purchase of 270 megawatts of electricity from the 620-MW Limay diesel power plant, under a deal that would benefit power consumers in terms of lower prices in the months of April, May and June.

“The effectivity of the said IPSA shall be upon the issuance of the final approval by the Energy Regulatory Commission,” Meralco said in a disclosure to the stock exchange.

Meralco said in a published petition to the ERC the contract price for the PanAsia supply agreement would be P13.56 per kilowatt-hour, lower than the anticipated P25.0194 per kWh in April, P22.1644 per kWh in May and P26.1507 per kWh in June, if sourced from the wholesale electricity spot market, the country’s trading floor of electricity.

Meralco said consumers would generate savings of P0.28 per kWh in the generation charge for April, P0.1944 per kWh for May and P0.3310 for June, under the PanAsia power supply agreement.

Meralco said without the PanAsia supply agreement, Meralco generation charge was forecasted to reach P7.6897 per kWh in April, P6.5696 per kWh in May and P7.2252 in June.

Meralco said under the deal, its exposure to WESM would be minimized to 10.09 percent of its total power requirements in April from the projected 12.58 percent without the Limay power plant.

Meralco’s exposure to the WESM is projected to go down to 5.13 percent in May from 7.39 percent without the Limay plant.

Meralco said it would only source 6.17 percent from the WESM in June, down from the original forecast of 8.79 percent without the Limay plant.

The distributor said aside from PanAsia, it also signed interim power supply agreements with various power suppliers to address the supply situation and lessen exposure to WESM during the period. source