Meralco gets 50-MW supply offer from Pilipinas Newton

By Lenie Lectura -  February 27, 2018

https://businessmirror.com.ph/meralco-gets-50-mw-supply-offer-from-pilipinas-newton/

THE Manila Electric Co. (Meralco) has received an offer from Pilipinas Newton Energy Corp. to supply 50 megawatts (MW) to the country’s largest distribution firm at a cost cheaper than previous offers.

This was confirmed by Meralco President Oscar Reyes.

When sought for details, Meralco Vice President and head of utility economics Lawrence Fernandez said Pilipinas Newton offered to sell its solar-power output at P2.98 per kilowatt hour (kWh).

Pilipinas Newton is constructing a P4.15-billion solar project in San Manuel, Pangasinan. It will use fixed photovoltaics modules for the generation of electricity with a peak capacity of up to 68.7 MW.

“The offer is now undergoing CSP [competitive selection process], which is being administered by the Bids and Awards Committee [BAC]. By end of this month, we would know from BAC if there are any challengers,” Fernandez said.

Under a CSP regime, another interested bidder could challenge the original offer. After the CSP has been successfully concluded, both parties must seek approval from the Energy Regulatory Commission (ERC) before their power-supply agreement (PSA) is implemented.

“While there is an initial agreement with Newton on price and terms, finalization of PSA will have to wait for completion of the price-challenge process,” Fernandez added. “This would be the fourth solar PSA after the three that have been filed with the ERC.”

Meralco recently entered into long-term PSAs with Solar Philippines and PowerSource First Bulacan Solar Inc.

Solar Philippines will supply 50 MW at a base price of P5.39 per kWh. Another PSA states that Solar Philippines could further supply Meralco with 75 to 85 MW for five years and another 85MW from the sixth up to the 20th year for P2.9999 per kWh,  which is significantly lower than the prevailing solar feed-in-tariff rates and a welcome development for consumers.

PowerSource First Bulacan, meanwhile, wants to supply Meralco 50 MW for P4.69 per kWh

These solar PSAs are all pending with the ERC.

Meralco said it foresees high demand, thus there is an urgent need for the final approval of the PSAs considering a significant peaking capacity deficit, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants.

Based on the utility firm’s distribution-development plan for 2015-2020, Meralco’s aggregate capacity requirement is forecasted to grow by a compounded average growth rate of 3.7 percent.