Meralco secures 670-MW supply from Aboitiz, SMC

Manila Electric Co. (Meralco) has secured supply deals with Aboitiz-led GNPower Dinginin Ltd. Co. (GNPD) and San Miguel Global Power Holdings Corp. for 670 megawatts of electricity for one year, according to an executive of the power utility firm.

Jose Ronald Valles, first vice president and head of regulatory management of Meralco, told reporters that both emergency power supply agreements (Epsas) would take effect on March 26.

He estimated the average rate offered by the companies at P7.80 per kilowatt-hour (kWh), which is 35 percent more expensive than the spot price of P5.78 per kWh recorded on March 12.

Joe Zaldarriaga, head of corporate communications of Meralco, sought to explain the wide gap, saying that the rate under the new contracts was not yet final as the deals were yet to be signed, adding that 'prices in the spot market may be different [by the time these are signed], considering that will already be part of the summer season.'

Under the Epsas, GNPD will supply 370 MW while San Miguel will provide the remaining 300 MW.

'We secured a certificate of exemption from the Department of Energy (DOE) to implement [the Epsas] immediately,' Valles said on the sidelines of the Philippine Electric Power Industry Forum on Monday.

San Miguel Corp. (SMC) will get supply from its coal-fired plants in the first two months of the Epsa.

Its liquefied natural gas (LNG) plant will take over the remaining 10 months of the deal as part of its commitment to the DOE to begin LNG terminal operations in May, according to Valles.

To recall, Meralco sought new partners for the supply deal after GNPD initially proposed a higher rate.

The power utility firm first entered an agreement with GNPD, a private limited partnership with Aboitiz Power Corp.'s Therma Power Inc. and the Ayala-led AC Energy Holdings Corp., in December to provide 300 MW until Jan. 25.