by Myrna Velasco, 25 August 2015
from Manila Bulletin
A power generation unit of the Consunji group has entered into a power supply agreement (PSA) with the local retail electricity supplier (local RES) of Manila Electric Company (Meralco) for 120-megawatt capacity.
The deal stretches from March 2016 until December 2018 – for duration of one year and nine months with provision for possible extension.
The generating unit of the Semirara Mining and Power Corporation involved in the supply pact is Southwest Luzon Power Generation Corporation, which is an expansion of its existing 600MW Calaca coal-fired power plant in Batangas.
The company noted that the PSA comes “with a term until December 25, 2018 which may be extended up to 4 years upon mutual agreement of the parties at a total capacity of 120MW effective March 26, 2016.”
The local RES of Meralco is its unbundled business entity under “M Power” which generally caters to the power supply needs of its contestable customers or the big-ticket end-users which can already contract with their preferred power suppliers.
The supply contracting policy for the contestable customers is underpinned by the rules set forth for the Retail Competition and Open Access (RCOA) regime of the industry.
The customers, which could be served by Meralco-Local RES or its ‘MPower’ at current threshold level, will be those with 1.0MW and above peak demand within its franchise area.
If the RES unit of the utility firm would opt serving the needs of contestable end-users outside its franchise area, then it will be required to secure a regular RES license – and that is different from being a local RES.
This early, Meralco is already being required by the Energy Regulatory Commission (ERC) to demarcate its power contracting between its contestable customers to the captive end-users of the segment which are still not given ‘free choice’ in their electricity supply sourcing.
The regime of full mandated competition will kick off around June next year, and contestable customers which may be served by RES are now obligated to undertake forward contracting with their chosen power suppliers.