San Miguel Corp. (SMC) said its power unit, SMC Global Power Holdings Corp. (SMCGP) lost P15 billion from 2021 to date which forced the conglomerate to request from the Energy Regulatory Commission (ERC) a temporary rate increase in its power supply agreements (PSAs) with the Manila Electric Co. (Meralco) signed in 2019.
SMCGP said it sought for a temporary and partial cost recovery relief only for the losses it incurred from January to May 2022 totaling to P5.2 billion.
SMC said the spike in global coal prices and unilateral natural gas supply restrictions from Malampaya made the original PSA rates unsustainable.
SMC requested a rate increase of P0.80 per kilowatt hour (kWh) from P4.3 kWh to P5.1 per kWh for its 670 megawatts (MW) of contracted baseload capacity from the Ilijan plant and an average of P4 per kWh from P4.3 to P8.3 per kWh for the 330 MW contracted baseload capacity from the Sual plant.
The company wants to recover the amount in the form of a rate increase on its contract capacity under the PSAs to be amortized over a period of six months which is equivalent to additional P0.28 per kWh for the said duration.
SMC said this will allow the company to continue sourcing fuel and viably operate to assure adequate supply of electricity in the grid.
Ramon Ang, SMC president and chief executive officer, said the company absorbed more than P10 billion in losses last year, which it did not file a claim for.
In the case of the Ilijan natural gas plant, Ang said they were forced to source costly replacement fuel from the Wholesale Electricity Spot Market because of the Malampaya gas resource’s “questionable unilateral notices of gas restrictions” which caused deration and failure to deliver available power capacity.
