Manila Electric Co. (Meralco) has requested that the Energy Regulatory Commission (ERC) reconsider its proposal concerning the fixed energy price and the 10-year contract term under the power supply agreement.
Meralco has sent a letter to the ERC as part of its comments on the proposed guidelines for the competitive selection process.
The company argues that mandating a fixed energy price will result in higher costs for consumers, as power suppliers will need to factor in the risk of non-recovery of costs or may choose not to participate in the bidding due to this risk.
Therefore, Meralco believes that this proposal does not align with the policy objectives of ensuring the least-cost pricing.
Furthermore, the power distributor contends that regulations regarding power supply agreements should primarily align with policies aimed at ensuring the lowest possible costs for customers and providing additional supply to the grid for the long term, not just the short term.
“For this purpose, we propose that a maximum contract term of at least 20 years be allowed. These policies have always been observed by Meralco in its procurement of power supply requirements and the execution of resulting power supply agreements with its suppliers,” it said.
The ERC is expected to release the final CSP guidelines by the end of the year.