Utility giant Manila Electric Co. (Meralco) has inked an emergency power supply agreement (EPSA) with South Premiere Power Corporation (SPPC) for a one-year supply of 300-MW baseload capacity.
SPPC is a subsidiary of San Miguel Global Power.
Meralco disclosed that the EPSA, which took effect on March 26, was exempted from the Competitive Selection Process (CSP) after receiving certification from the Department of Energy (DOE).
Meralco said that the EPSA comprises a two-part tariff consisting of a fixed cost of P1.75 per kWh and a variable cost indexed on fuel price movements.
The power retailer clarified that this arrangement will partly substitute the capacity covered by its 2019 PSA with SPPC, which was previously put on hold due to a writ of preliminary injunction issued by the Court of Appeals.
Meralco underscored that the implementation of the EPSA will safeguard consumers from volatile and potentially higher generation costs in the Wholesale Electricity Spot Market, especially during the dry season when power demand surges.
The company is also seeking the DOE’s approval for another EPSA, which will cover its 180-MW baseload capacity requirement.
Despite conducting two rounds of CSPs, both attempts failed to attract bidders.
Therefore, Meralco applied for an EPSA instead to address the pressing need for additional supply during the dry season.
Meralco emphasized that it is taking steps to manage challenging circumstances and mitigate any impact on power rates for its over 7.6 million consumers.
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