Meralco seeks ERC nod on 7 power supply pacts

http://www.bworldonline.com/content.php?section=Corporate&title=meralco-seeks-erc-nod-on-7-power-supply-pacts&id=126977

MANILA Electric Co. (Meralco) is seeking regulatory approval to source 3,551 megawatts (MW) of its power requirements from seven companies, including two under its power generation subsidiary.

Alfredo S. Panlilio, Meralco senior vice-president, said in a statement that the power supply agreements (PSAs) were based on its long-term load projections as it expected electricity sales in its service area to grow by a compounded average rate of 3.6% to 3.7%

“In keeping with Meralco’s mandate to source electricity in the least cost manner and to ensure reliability and affordability of supply for all our customers, especially in light of the expected continuous increase in demand and number of customers, coupled with the impending expiration of Meralco’s existing PSAs from 2019 to 2020, there is a pressing need for Meralco to source additional capacity through bilateral power supply contracts,” said Mr. Panlilio, who is also the utility’s head of customer retail services and corporate communications.

In a disclosure to the stock exchange on Tuesday, the distribution utility said it had filed its application with the Energy Regulatory Commission (ERC) for the approval of PSAs with two subsidiaries of Meralco Powergen Corp. (MGen) that are under construction, namely Redondo Peninsula Energy, Inc., Atimonan One Energy, Inc.

Meralco is planning to source 225 MW from Redondo for its base-load requirement. The supplier is building a two-unit coal-fired power plant each with 300 MW in the Subic Bay Freeport Zone.

Based on data from the Department of Energy, target testing and commissioning of Redondo’s first unit is October 2018 while the second unit is December 2018. Commercial operation is expected in 2019.

From Atimonan, Meralco has agreed to buy 1,200 MW of electrical output. Atimonan is building two 600-MW coal-fired power plants in that town in Quezon. Testing and commissioning of the first unit is expected in December 2020 while in May 2021 for the second unit. Their respective commercial operations are scheduled in the fourth quarter of 2020 and the fourth quarter of 2025.

Separately, Semirara Mining and Power Corp. (SMPC) told the bourse that it was informed by St. Raphael Power Generation Corp. of its PSA with Meralco for up to 400 MW of electrical output.

This comes after SMPC and Meralco disclosed last week that they agreed to enter into a joint venture to build a two-unit coal-fired power plant in Calaca, Batangas each with a capacity of 350 MW under St. Raphael Power.

The utility is also seeking approval for PSAs with Central Luzon Premiere Power Corp., Mariveles Power Generation Corp., Panay Energy Development Corp. and Global Luzon Energy Development Corp.

Meralco said it would buy 528 MW of electrical output from Central Luzon Premiere Power Corp., which plans to construct, own and operate four 150-MW circulating fluidized bed coal-fired power generating facility in Pagbilao, Quezon. The plan is expected to be operational by 2021.

The listed company will also purchase 528 MW from Mariveles Power Generation Corp., which is looking to build four 150 MW circulating fluidized bed coal-fired power generating facility in Mariveles, Bataan for commercial operation in 2020.

Meralco has also agreed to buy 70 MW of electrical output from Panay Energy Development Corp.’s two 82 MW and 150 MW coal-fired power generating facility in La Paz, Iloilo. The facility is expected to operate by August this year.

The distribution utility has also entered into a deal with Global Luzon for the purchase of 600 MW of electrical output from its two 335 MW coal-fired power plants in La Union province when it starts operations in 2022.

“To ensure reliable, adequate, and efficient electric service, and for us to meet the needs of our consumers, it is imperative on Meralco’s part to secure our supply requirements. This is likewise to better address the increase in power demand, especially during the summer months, which recently has risen to record levels,” Mr. Panlilio said.

On Tuesday, Meralco closed unchanged at P339 per share.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is party owned by Philippine Long Distance Telephone Co. (PLDT).

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