Power utility giant Manila Electric Company (Meralco) has inked a one-year emergency power supply agreement (EPSA) with South Premiere Power Corporation (SPPC) of the San Miguel group for the delivery of 300-megawatt capacity from March 26, 2023 to March 25, 2024. The supply contract provided for a rate based on a two-tiered setting: the P1.75 per kilowatt hour (kWh) fixed cost,   plus the cost of fuel which is of pass-through nature. “The EPSA reflects a two-part tariff composed of a P1.75 per kWh fixed cost and variable cost indexed on fuel price movements,” the utility firm noted. Meralco emphasized that the supply procurement was a recourse following the exemption from competitive selection process (CSP) that the Department of Energy (DOE) had approved for this particular exercise for immediate implementation. CSP refers to the bidding process to be enforced by distribution utilities, such as Meralco, when they will procure supply that shall be underpinned with power supply agreements. Meralco explained that this fraction of supply sourcing “partially replaces the capacity covered by Meralco’s 2019 PSA with SPPC, which was subjected to a writ of preliminary injunction issued by the Court of Appeals.” To note, SPPC elevated its case to the Court of Appeals when its bid for P0.30 per kWh rate hike was junked by the Energy Regulatory Commission. That plea with the regulator was meant to recoup losses arising from surges in fuel prices in the world market. According to Meralco, “the execution of the EPSA will help shield electricity consumers from volatile and potentially higher generation costs in the Wholesale Electricity Spot Market, which is historically recorded during the dry season when power demand spikes.” Apart from the contract with SPPC, Meralco is eyeing another one-year contract with the Dinginin coal-fired power plant of the Aboitiz-Ayala group for added capacity that will plug its supply gap, especially during the critical months of summer. Meralco also said it is seeking another approval from the DOE for EPSA exemption covering 180MW of its baseload capacity requirement, “to boost available supply and help address the reduced capacity of natural gas-fired power plants affected by the continued Malampaya gas supply restriction.” It specified that “the 180-MW supply was originally subjected to two rounds of CSPs, which both failed due to lack of bidders.” Given the urgency of the additional supply for the dry season, Meralco stated that it needed to resort to another emergency supply procurement. Alarm bells had already been raised on tight supply as well as probabilities of brownouts during the summer months, especially within the stretch of the summer months, hence, Meralco noted that it will need to satiate required capacity during these critical periods so it can spare its customers from service interruptions. “Meralco remains committed to its mandate to deliver stable, reliable, and least-cost supply to its 7.6 million customers and unceasingly works to mitigate any impact of challenging circumstances on its power rates,” the utility firm stressed.