Power utility giant Manila Electric Co. is not ready to terminate its power supply agreements (PSAs) with San Miguel Corp.’s subsidiaries South Premiere Power Corp (SPPC) and San Miguel Energy Corp. (SMEC) for 1,000 megawatts of power generation capacity.
Meralco issued the statement after the Energy Regulatory Commission denied SMC’s petition for a temporary rate hike due to losses incurred from an unprecedented increase in coal prices and gas constraints of the Ilijan natural gas power plant.
“For Meralco, we shall comply with the decision, and we shall exert all available remedies to prevent termination of the PSAs with SPPC and SMEC,” said Jose Ronald V. Valles, Meralco’s first vice president and head of regulatory management.
Valles said that if SPPC and SMEC cannot deliver power to Meralco for whatever reason, “we are constrained to source up to 1,000 MW from WESM without prejudice to the resolution of whatever legal remedies Meralco may pursue against SPPC/SMEC under the PSA.”
Meralco has warned that rates at the WESM, the country’s trading floor of electricity, continue to be volatile with a projected rate of P8.9404 per kilowatt-hour.
Valles said Meralco already sought offers and entered into emergency PSAs supply agreements (EPSAs) with other generation companies to ensure continuity of stable, reliable, and adequate supply to its customers.
“We are hoping for the swift action of the DOE in exempting the EPSAs from undergoing CSP (competitive selection process). Without these EPSAs, our customers may become exposed to volatile prices,” Valles said.