The Manila Electric Co. (Meralco) executed an emergency power supply agreement (EPSA) with Aboitiz Power’s GNPower Dinginin Ltd. for the supply of 300 megawatts (MW) baseload capacity starting yesterday, December 15, and until January 25.
GNPower Dinginin operates a 1,336 MW coal-fired power plant in Mariveles, Bataan.
Meralco said the capacity will partially replace the 670 MW worth of power supply agreement (PSA) with San Miguel Corp.’s South Premiere Power Corp. (SPPC) which was subjected to a temporary restraining order (TRO) issued by the Court of Appeals (CA).
The power distributor said the EPSA which has a rate of P5.96 per kilowatt hour will lessen Meralco’s exposure to the wholesale electricity spot market (WESM) and in turn, partly shield customers from volatile and potentially higher generation costs.
Meralco added it continues to exhaust all measures to continue supplying its customers with sufficient and reliable power while mitigating the impact of the TRO to its customers.
Earlier this week, Meralco formally issued a notice of claim against SPPC to cover the additional costs it has been incurring as a result of the 60-day TRO on their PSA.
In a letter dated Dec. 12, 2022, Ronald Valles, Meralco first vice president and head of regulatory management office, asked SPPC to pay the price difference between the contract price and the WESM price, to which Meralco would be exposed during the effectivity of the TRO.
Valles said this will be on top of all applicable fines, penalties and liquidated damages under the PSA in the event the CA eventually resolves the main case and denies the petition of SPPC.
Last month, the CA issued a 60-day TRO in favor of SPPC which made the appeal after the Energy Regulatory Commission ruled the agreed price in PSA is fixed in nature and the grounds for increase cited by SPPC and Meralco were not among the exceptions that would allow for price adjustment.
The TRO rooted from the ERC’s denial of the joint request of Meralco and SPPC for a temporary and partial cost recovery relief only for the losses incurred by SMC from January to May 2022, mainly due to the unprecedented spike in the cost of coal and natural gas — the types of fuel utilized by the company’s power plants to supply 1,000 MW worth of electricity to Meralco, including the capacity from SPPC.
