Meralco signs two power supply deals

Business Mirror
03 Jun 2014 Written by Lenie Lectura

POWER distributor Manila Electric Co. (Meralco) has inked two separate deals to buy the output of Montalban Methane Power Corp. (MMPC) and Philippine Power and Development Co. (PPDC).

In separate filings with the Energy Regulatory Commission (ERC), the utility firm signed on May 15 a power-supply agreement (PSA) with PPDC for the purchase of electric capacity and energy from the power firm, which offered to supply and sell to Meralco up to 1,051 kilowatts (kW). Meralco’s applications were posted on the ERC’s web site on Wednesday. PPDC owns and operates three run-of-river hydropower plants—the 448-kW Palakpakin, 75-kW Calibato and 528-kW Balugbog power facilities, all situated in Laguna.

Another PSA was signed on May 16 with MMPC for the purchase of 8,190 kW of electricity that will be sourced from the latter’s power plant in Rizal.

Meralco’s PSA with MMPC is valid for two years, while that of PPDC will run for five years. The said agreements are subject to ERC approval.

MMPC is selling its output to Meralco at P5.50 per kilowatt-hour (kWh). “The P5.50 per kWh contract price would result in cost savings in the blended generation rate of about P0.7420 per kWh. This translates into a P0.000524-per-kWh decrease in the generation charge should the Meralco-MMPC PSA be implemented,” said the utility firm.

Likewise, the contract price between Meralco and PPDC set at P5.0056 per-kWh would translate into a P0.000113-per-kWh decrease in the generation charge.

“Meralco submits that the contract price provides for a much lower cost of power compared with that of the Wholesale Electricity Spot Market, where the simulated cost is P6.242-per-kWh,” said Meralco. Aside from cheaper power rates, the power plant is an embedded generator. “The delivery of power from said plant provides benefits in terms of support for Meralco distribution system and savings on purchased power since there are no transmission charges and system losses,” said the utility firm.

Meralco also said the immediate implementation of the PSAs will not only benefit customers in terms of environmental benefits but will also contribute to the government initiative to encourage the development of renewable energy. On Monday Meralco said it signed a 20-year PSA with San Buenaventura Power Ltd. Co. (SBPL), the joint-venture firm formed between Meralco PowerGen (MGen) and a unit of a power firm in Thailand.

“Meralco has signed a long-term PSA for a 455-megawatt [MW] capacity electrical output with SBPL,” the utility firm’s legal head William Pamintuan said.

MGen, the power-generating arm of Meralco, and New Growth BV, a wholly owned subsidiary of Thailand-based Electricity Generating Public Co. Ltd.—which is partly owned by Electricity Generating Authority of Thailand—formed SBPL to develop a 460-MW coal-fired power plant in Quezon.

The power facility will be situated adjacent to the existing 460-MW coal-fired power plant of Quezon Power Philippines Ltd., which has an existing 25-year PSA with Meralco.

Meralco is assigned to distribute electricity to customers in Metro Manila, Bulacan, Cavite, Rizal, and in some parts of Batangas, Laguna, Quezon, and Pampanga. source