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Around eight million consumers of power distributor Manila Electric Co. (Meralco) were shielded from even higher electricity bills last summer, with the firm’s emergency supply deal with a unit of San Miguel Corp. (SMC).
In a joint filing posted on the Energy Regulatory Commission’s (ERC) website, the Pangilinan-led company said its 1,200-megawatt (MW) contract with SMC’s South Premiere Power Corp. (SPPC) would lead to total savings of about P10.7 billion for its customers in Metro Manila and nearby provinces.
Meralco noted that SPPC’s committed rate of P6.6128 per kilowatt hour (kWh) was cheaper by P1.0257 per kWh if the power would be tapped from the Wholesale Electricity Spot Market (WESM).
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Since its deal with SPPC was entered under an emergency power supply agreement (EPSA), Meralco was allowed to immediately deploy the needed electricity late in March, especially as the country was facing hotter months due to El Niño, triggering a spike in electricity consumption.
“While the provision states that the distribution utility must wait for the occurrence of the FM/FE (force majeure or fortuitous event) to notify the DOE (Department of Energy) and ERC of such event and the emergency power supply procurement, given the magnitude of the capacity deficit, its impact, and Meralco’s least cost mandate, Meralco proactively secured an alternative source of supply,” the document read.
It added that Meralco “sufficiently complied” with the government rules for the procurement supply.
The company also maintained that it “sufficiently established” that the contract was “urgently needed to ensure that deficient supply beginning 26 March 2024 is addressed and that Meralco’s customers are assured reliable and continuous supply.”
Their EPSA would only last for one year—from March 26, 2024, to March 25, 2025.
Now, both parties seek the ERC’s issuance of a provisional authority to continually implement their EPSA, allowing Meralco to “have a steady, continuous, guaranteed, and reliable source of electricity.”
The deal would then be subject to pre-termination once the 2024 Meralco-SPPC power supply agreement is implemented.