Meralco eyes new EPSA with SPPC

MANILA, Philippines — The Manila Electric Co. (Meralco) is looking to secure a new emergency power supply deal with San Miguel’s South Premiere Power Corp. (SPPC) for 330 megawatts (MW) of capacity.

Meralco is negotiating with a potential supplier for a new emergency power supply agreement (EPSA) to replace the capacity of San Miguel Energy Corp. (SMEC), which ceased its supply of 330 MW to Meralco starting July 24, 2023 following a recent Court of Appeals (CA) joint decision.

To ensure continuity of supply and minimize exposure to volatile wholesale electricity spot market prices, Meralco last month sent a request for proposal letters to several power suppliers for the replacement emergency power supply of 330 MW covering the period from Aug. 26, 2023 to March 25, 2024.

Meralco said the only offer it received was from SPPC, with terms and conditions generally similar to the 480-MW EPSA executed between both companies in March, except for some items.

Meralco executed in March an EPSA with SPPC valid until March 25, 2024 to partially replace the capacity covered by the power distributor’s 2019 power supply agreement with SPPC which was subjected to a CA-issued writ of preliminary injunction.

The contract provided an initial 300-MW baseload capacity starting March 26, 2023 that increased to 480 MW beginning April 1, 2023.

“We reported earlier that the 330 MW that is being supplied by Sual power plant was already terminated effective midnight of July 24. After we received that notice of termination, we immediately looked for a replacement capacity from different power suppliers and we’ve written several power suppliers, most of them or all of them declined, and only one responded, except for one that is San Miguel,” Meralco first vice president and head of regulatory management Jose Ronald Valles said.

The CA, in a joint decision dated June 27, 2023, made permanent the writ of preliminary injunction earlier granted to SPPC, allowing the Ilijan plant to cease supplying a total of 670 MW to Meralco.

SMEC’s petition for writ of preliminary injunction, meanwhile, was declared moot and academic.

“The power supply agreement has been terminated already so we need to find replacement capacity. So what we’re doing is to procure that 330-MW replacement capacity. And in the event the ERC gets a favorable ruling from the Court of Appeals, then we will terminate the EPSA immediately because that means that the 330 MW of Sual is back, assuming that Sual agrees with the decision of the Court of Appeals,” Valles said.

Meanwhile, Valles said Meralco is also waiting for ERC approval to proceed with the competitive selection process for the 1,800-MW requirement of the company starting next year.

“For the 1,800 MW that was being supplied by Excellent Energy for 1,200 MW and 600 MW by Masinloc, both of these contracts have been terminated by San Miguel both on the lapse of the six month period under the power supply agreement. They sent us a notice of termination and we are waiting for the ERC to act on the termination of these contracts because the ERC has advised us to await their approval of the termination,” Valles said.