The Manila Electric Company (Meralco) on Wednesday said it has executed the emergency power supply agreement (EPSA) with South Premiere Power Corp. (SPPC) for a 300-megawatt (MW) baseload supply.
In a statement, Meralco said the EPSA is effective from March 26, 2023 to March 25, 2024.
This as Meralco was given the green light by the Department of Energy (DOE) to exempt the EPSA from the competitive selection process (CSP).
'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,' the distribution utility said.
Meralco said the emergency power supply deal reflects a two-part tariff - a PHP1.75 per kilowatt hour fixed rate and a variable cost indexed on fuel price movements.
The 300-MW EPSA partially covers the 670-MW PSA between Meralco and SPPC in 2019, which was subjected to a writ of preliminary injunction issued by the Court of Appeals.
Meralco said it also requested approval from the DOE for an additional EPSA to address its 180-MW baseload capacity requirement.
The new agreement aims to increase its available power supply and offset the reduced capacity of natural gas-fired power plants, which have been affected by the ongoing Malampaya gas supply restrictions.
'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 sought approval to execute an EPSA instead,' it added.