ERC: Decisions on Meralco PSA that underwent CSP out soon

By Lenie Lectura -February 5, 2020
from Business Mirror

THE Energy Regulatory Commission (ERC) has given assurances that it will be able to release decisions on the Manila Electric Co.’s (Meralco) power-supply agreements (PSAs) that underwent competitive selection process (CSP).

Lalabas na (They’re coming out soon). The resolutions are being finalized,” said ERC Chairman Agnes Devanadera.

These PSAs are with First Gen Hydro Power Corp., Phinma Energy Corp. and South Premiere Power Corp. for the supply of 500-megawatt mid-merit capacity for five years that should have started on December 26, 2019; and with Phinma Energy, SPPC and San Miguel Energy Corp. for the supply of 1,200-MW brownfield capacity.

Devanadera said the resolution for these PSAs were delayed because certain parties opposed the applications for approval of these supply contracts even though these underwent a competitive process.

“If there is an intervenor in the case then we should also act on it,” the ERC chief said, explaining that the delays in resolving cases could, at times, be attributed to this.

“Within February, by end of the month, we will come out with the resolutions,” on pending PSAs, “including that of the 1,800 MW of Meralco because ‘yun naman ang importante (that’s the important one].”

Petition filed

The Power for People Coalition (P4P) filed last year a petition for intervention at the ERC, questioning the results of the competitive bidding.

“We are pleased that after over two years of Meralco’s insistent efforts to evade biddings for their power-supply agreements, the CSP finally took place,” said Gerry Arances, convenor of the Power for People Coalition. “We find it alarming, however, that Meralco is still so set on ensuring that power consumers remain tied to paying for dirty energy in the coming decade, while also suffering the impacts of destructive power generation,” Arances added.

The National Association of Electricity Consumers for Reforms Inc. (Nasecore), on the other hand, has asked the ERC to penalize Meralco for alleged abuse of market power.

Nasecore claimed that Meralco allegedly coerced the ERC into granting them provisional authority for their PSA applications.

Nasecore alleged that Meralco’s application for provisional authority for the issuance of the PSAs is tantamount to a threat to the government regulator as it provided the ERC with a deadline of December 26, 2019, to approve the contracts.  Otherwise, it added, Meralco may be “exposing” its consumers to “volatile” electricity prices.

“The subject application seeks this PA, which means that there is an emergency situation not within the control of Meralco. However, it should be stressed that this emergency situation is not based on a ‘force majeure’ situation,” Nasecore said.

In short, there was no force majeure beyond Meralco’s control that prevented it from sourcing, procuring and entering into bilateral contracts, in accordance with the law and rules governing the same, on the Power Demand and Supply Outlook, and Distribution Development Plan it submitted to the DOE as early as 2016.

Obviously, Nasecore said, Meralco failed to do this; thus, creating this emergency condition which is of its own making.” It added that “this application holds hostage the regulators into approving the contracts. It’s a veiled threat not only to ERC but also to its consumers.”

However, Meralco assistant vice president Joe Zaldarriaga said these PSAs underwent

CSP that were observed by Department of Energy.

“We presented and continue to present our evidence and testimony in public hearings at the ERC, during which other consumer groups expressed their support for the approval of the PSAs except perhaps for a few.

“We believe the PSAs will benefit our customers through cost-competitive and reliable supply. To also say that we issued a threat or any form thereof is baseless, unfair and devoid of factual and legal basis,” said Zaldarriaga.

“I really hope that we just stick to the issues which is to obtain the least cost through reliable and adequate supply as evidenced by our submission to the regulator,” he added.