It’s another win for Manila Electric Co.’s customers as they can expect savings of about P4.4 billion over the next five years, as the power distributor signed three more contracts for supplies totaling 500 megawatts.
These contracts were with subsidiaries of the San Miguel, Ayala and Lopez groups—respectively, South Premier Power Corp. for 290 MW; Phinma Energy Corp. for 110 MW; and First Gen Hydro Power Corp. for 100 MW.
“We thank our generation company partners [suppliers] for offering generation rates well below the prevailing generation rates and the Meralco … price cap,” company president Rey Espinosa said during the signing ceremony held yesterday at Meralco headquarters in Pasig City.
Yesterday’s signing followed a similar development last week when Meralco inked contracts also with Phinma Energy (200 MW) and South Premiere (670 MW) as well as San Miguel Energy Corp. (330 MW) —for a total of 1,200 MW.
Also yesterday, Meralco vice president Lawrence Fernandez said customers would feel the effects of these contracts starting in February 2020, considering that existing contracts that these new ones will replace are in effect until December.
“The contracts’ all-in rate already includes line rental and value-added tax and the cost of replacement power for all plant outages,” Espinosa said. “The generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers.”
The Meralco president said resulting prices from the competitive bidding were significantly lower than the average generation cost today of about P5.88 a kilowatt-hour (kWh) including VAT.
“The results of today’s signing for 500 MW are expected to save consumers around 13 centavos per kWh, starting Dec. 26,” Espinosa said.
He added that, along with the results of the first batch of contracts signed last week, consumers are projected to enjoy total savings of about P13.86 billion per year, or a rate reduction of 41 centavos per kWh.