Meralco seals supply deal with Lopez unit

Manila Electric Co. (Meralco) has forged a power supply agreement with Bacman Geothermal Inc. (BGI), which is set to provide 50 megawatts to the country’s largest distribution utility over the next five years.

In separate disclosures Wednesday, Meralco and the Lopez-led Energy Development Corp., parent firm of BGI, reported that the agreement would address the supply shortage expected in the summer of 2015, and mitigate the utility firm’s exposure to the Wholesale Electricity Spot Market (WESM).

The power supply agreement, which can be extended by another two years, also formed part of Meralco’s “continuing efforts to source additional capacities through interim bilateral contracts with power producers with available contracted capacity.”

It will be submitted to the Energy Regulatory Commission for approval.

BGI will provide the agreed capacity through the Bacon-Manito geothermal power plants located in Albay and Sorsogon. The facilities are now fully operational with a gross output of approximately 130 megawatts (MW).

Based on previous estimates, EDC said that it expected to generate P160 million in revenue per unit each month. With commercial operations in full swing at 130 MW, EDC earlier estimated revenues to reach as much as P4.3 billion annually.

When EDC acquired the geothermal complex from the government in 2010, the power plants were practically inoperable, generating only 3 percent of available capacity.

EDC then undertook rehabilitation activities, which began in 2010, to ramp up capacity to 130 megawatts.