By Lenie Lectura - January 30, 2017
THE Manila Electric Co. (Meralco)
and Strategic Power Development Corp. (SPDC), a subsidiary of SMC Global
Power Holdings Corp., have entered into an interim power-supply agreement
(Ipsa) for the purchase and supply of electricity during the 20-day shutdown of
the Malampaya gas facility.
The Ipsa must, however, be approved
by the Energy Regulatory Commission (ERC).
“In order to mitigate exposure to
the Wholesale Electricity Spot Market and to provide additional capacity for
such period that could contribute to the availability and affordability of the
supply of electricity to Meralco’s customers, there is a need for Meralco to
source the corresponding deficiency through interim bilateral supply contracts
with power suppliers who have available capacity,” they said in their 13-page
filing.
Under the contract, SPDC shall
supply Meralco “100 megawatts [MW] per hour of electricity from 0901H to 1000H
and 2001H to 2100H, and 150 MW per hour from 1001H to 2000H on a
firm basis. The power will be sold at P4.35 per kilowatt-hour (kWh), excluding
taxes and line rental. Based on simulations, the effective delivered price
under the Ipsa for the period January 28 to February 16 is P4.901 per
kWh.
SPDC is the Independent Power
Producer Administrator of the 345-MW San Roque hydropower plant in Pangasinan.
Meralco said there is a need to
source additional capacity as it “foresees a capacity deficit in its portfolio”
while Malampaya is shut down.
From January 28 to February 16,
the Malampaya gas field would not be able to supply three gas plants with an
aggregate capacity of 3,211 MW to the Luzon grid, of which, 2,565 is supplied
to Meralco’s franchise area.
The maintenance shutdown of the gas
facility will coincide with scheduled maintenance of other power plants and
possible occurrences of forced plant outage.
Meralco also said it is allowed to
enter into bilateral power contracts subject to review by the ERC, following
two failed biddings.
On January 12 Meralco issued an
invitation to challenge SPDC’s proposal. However, no qualified submissions were
received per the deadline set. As such, Meralco had to issue another invitation
for a price challenge. Under the Competitive Selection Process (CSP), should
there still be no qualified submissions received for the second deadline,
Meralco shall execute the Ipsa with SPDC.
“Having received no qualified
submissions by the final deadline set as published, Meralco awarded the Ipsa to
SPDC, after which Meralco and SPDC proceeded with the finalization and
execution of the Ipsa,” their application stated.
The Ipsa was executed on
January 24 and is now up for review by the ERC.
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