PSALM may no longer extend Meralco’s supply contract

MANILA, Philippines—State-run Power Sector Assets and Liabilities Management Corp. (PSALM) is no longer keen on extending by another four months its supply contract with power distributor Manila Electric Co. (Meralco).

In a text message, PSALM president and CEO Emmanuel Ledesma Jr. stressed that the PSALM board only approved an extension of two months, as opposed to the six-month period sought by the distribution utility.

Ledesma said PSALM decided to extend the contract for only two months because it was confident that it could turn over by February the 246-megawatt Angat hydropower plant to its new owner, Korea Water Resources Corp. (K-Water).

By then, Meralco would have to negotiate its additional power requirements with K-Water.

Meralco earlier wanted a six-month extension of the transition supply contract with PSALM, or until June 2013, when the open access and retail competition scheme is expected to commence. Under this scheme, large power users that consume 1 MW or more every month will be able to choose their own electricity suppliers.

To ensure adequate supply within its franchise area, Meralco, meanwhile, signed earlier this month new power supply agreements with Aboitiz-led Therma Luzon Inc. and AP Renewables Inc. to cover the additional volume it would need during the six-month transition period.—Amy R. Remo