By MYRNA M. VELASCO
A regulatory approval on the power supply agreements (PSAs) of Manila Electric Company (Meralco) for 1,700-megawatt offtake or capacity purchase from power generation companies (GenCos) is due for issuance this month.
This was indicated by ERC Chairperson Agnes T. Devanadera in an interview with the media, with her noting that the timeframe of the decision will be before Valentine’s Day (which is February 14) or until the end of this month.
“We are already finalizing the resolutions, so within this February,” the ERC chief said, emphasizing that PSA approvals will be extended to the aggregate 1,700-MW capacity that the utility firm had cornered through the series of competitive selection processes (CSPs) carried out in September last year.
In fact, for the February billing of Meralco this year, it is anticipated that the lower rates from its provisionally approved PSAs will already be felt by its customers – and will be part of the factors that will drive down the generation charge component on its overall pass-on tariff.
In the 1,200-MW capacity procured by Meralco for its baseload capacity needs, the calculated reduction in power rates will be as much as ₱0.41 per kilowatt hour (kwh) for the 10-year duration of the supply contracts.
On the consumers’ pockets, that will redound to overall savings of ₱13.86 billion annually or aggregate ₱138.60 billion within the decade-stretch of the contracts.
The GenCos that cornered the contracts for baseload and peaking supply of Meralco are those owned and operated by the energy investment subsidiaries of San Miguel Corporation; Ayala Corporation and First Gen Corporation.
For the PSAs on peaking capacity, the estimated savings that consumers would be able to generate would be as much as ₱4.4 billion annually or ₱22 billion over the five-year span of the contracts.
In terms of tangible rate reduction, this is seen resulting in ₱0.13 per kwh downtrend in the bills of consumers.
The total peaking capacity procured by Meralco had been 500MW.
With the short to medium-term supply portfolio of the country’s biggest power utility company already covered, the next phase in its CSP process is its need for additional capacity of 1,200MW by year 2024.
The terms for reference for the company’s CSP though is still being fine-tuned and has yet to secure final go-signal from the Department of Energy.