ERC delays blamed for aborted power deals

Delays on the part of the Energy Regulatory Commission (ERC) triggered the withdrawal by San Miguel Corp. (SMC) of two power supply deals with Manila Electric Co. (Meralco) to provide 1,800 megawatts of crucial supply by 2024 and 2025, the conglomerate said.

In a stock exchange disclosure, SMC said the ERC had failed to issue final approvals for the power supply agreements with Excellent Energy Resources Inc. (Eeri) and Masinloc Power Partners Co. Ltd. (MPPCL)-both subsidiaries of SMC Global Power Holdings Corp.-within the respective 'longstop dates' on Sept. 17, 2021 and Sept. 23, 2021.

Longstop dates refer to the agreed time frame during which all the conditions precedent for a transaction should be completed. Both PSAs were filed in March 2021 and had a six-month longstop date.

ERC Chair Monalisa Dimalanta explained, however, that the commission had yet to review the motion for withdrawal filed by Meralco on Monday, adding that she was 'hopeful' it would not take years for the agency to reach a decision.

'If we do not find any complicated issues [in the contracts], then the review won't take too much time,' she said, responding to complaints that the ERC had taken too long to review PSAs.

Dimalanta added that the Eeri and MPPCL may have failed to submit required documents prior to final approval, in turn causing the delay. This was not confirmed by Meralco.

Under the PSAs, Eeri was to supply 1,200 MW through its liquefied natural gas plant at a levelized cost of electricity (LCOE) of P4.1462 per kilowatt-hour (kWh) by 2024.

MPPCL, meanwhile, proposed to provide the remaining 600 MW via its coal-fired plant at P4.2605 per kWh by 2025.