Published September 27, 2019, 10:00 PM
By Myrna
M.Velasco
The Energy Regulatory Commission
(ERC) is still not inclined at confirming that the new power supply agreements
(PSAs) underwritten by power utility giant Manila Electric Company (Meralco)
are on the “least cost” sphere as these are still subject to the regulatory
body’s evaluation.
ERC Chairperson Agnes T. Devanadera
forthrightly stated that “at the moment, we cannot as yet determine or confirm
whether the proposed rate in the Meralco PSA adverted to was indeed the least
cost.”
She qualified though that “once the
subject Meralco PSA application has been filed, the ERC will conduct a thorough
evaluation to ensure that the proposed rate in the PSA is the least cost.”
The regulatory body indicated that
in its evaluation and eventual ruling on the PSA applications arising from the
conduct of competitive selection process (CSP) of the DUs, it will have to
guarantee that the consumers will only be afforded the “least cost option” to
pay for in their future electric bills.
By edict, the CSP exercise or the
auction of power supply procurements of the DUs must yield not just the “lowest
cost” for Filipino consumers, but the procuring distribution utility must also
ensure that such power supply must be delivered as needed.
In the recent CSPs of Meralco, it
procured brownfield baseload capacity of 1,200-megawatts to partly serve its
10-year requirements; then 500MW for the mid-merit needs of its load network
for the next five years.
The power supply deals had been
cornered by the industry’s major players – such as the various energy
corporates of the San Miguel group; PHINMA Energy Corporation (recently renamed
as AC Energy Philippines, Inc.) of the Ayala Group; and First Gen Corporation
of the Lopez group – based on their headline rate and all-inclusive levelized
cost of energy (LCOE) offers.
Following the conclusion of the CSP
and the signing of the contracts, the parties-in-interest will need to file
these power supply contracts with the ERC for its evaluation, validation and
then approval.
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