‘Meralco customers save P631 million from SMC power deal’

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) could save up to P631 million in electricity costs under a proposed four-year supply deal with San Miguel Group’s Sual Power Inc. (SPI).

In a joint filing, Meralco and SPI have asked the Energy Regulatory Commission (ERC) to grant provisional authority or interim relief for their 200-megawatt baseload power supply agreement.

The PSA resulted from a competitive selection process (CSP) conducted by Meralco, in which SPI emerged as the winning bidder after submitting the lowest offer of P4.2955 per kilowatt-hour (kWh).

Meralco noted that the delivered rate under the PSA is way lower than the effective cost of P4.6560 per kWh, which would have been the price if the equivalent capacity had been sourced from the spot market.

By sourcing the capacity through the PSA, the company said the average blended generation rate will be reduced by about P0.0153 per kWh, resulting in savings of about P631 million.

The 200-MW baseload power supply is intended to ensure a continuous and reliable electricity supply for more than eight million Meralco customers in Metro Manila and nearby provinces.

It is also expected to help Meralco meet its obligations under the Renewable Portfolio Standards, a policy that requires power utilities to source a portion of their supply from eligible renewable energy plants.

For the latest Meralco CSP, even companies operating conventional plants were allowed to participate, but they would be required to offer financial guarantees in the form of renewable energy certificates.

The supply deal between Meralco and SPI will run until January 25, 2030, unless earlier terminated in accordance with the terms of the agreement and subject to approval by the ERC.