Meralco: Subjecting PSAs with power producers ‘unfair’

By Lenie Lectura – May 1, 2018
from Business Mirror

A GOVERNMENT proposal to subject to “Swiss challenge” the pending power-supply agreements (PSAs) between the Manila Electric Co. (Meralco) and power producers is unfair, a Meralco official said.

“I think it would be unfair because some agreements were already signed. For example, we have concluded with Meralco. We can really show it’s been benchmarked against other projects. We hope it will no longer apply on those projects, those that have already gone through the process that was prescribed then,” said Rogelio Singson, president of Meralco PowerGen Corp. (MGen), a subsidiary of Meralco.

Meralco’s PSAs applications pending before the Energy Regulatory Commission (ERC) cover a total of 3,551 megawatts with various power-generation companies (gencos).

These are with Redondo Peninsula Energy Inc. (RP Energy), St. Raphael Power Generation Corp. , Atimonan One Energy Inc., Central Luzon Premiere Power Corp., Mariveles Power Generation Corp. of the San Miguel Group and Global Luzon Energy Development Corp. of Global Business Power Corp.

Meralco and these gencos signed the bilateral contracts before April 30, 2016, the deadline set by the ERC. After April 30, 2016, all PSAs should undergo competitive selection process (CSP), which requires distribution utilities and gencos to subject their PSAs to price challenges.

These PSAs are still pending for approval before the ERC, amid allegations the regulators favored Meralco by excluding the power distributor from subjecting their power deals to CSP. Consumer groups and other sectors alleged the ERC deliberately extended the CSP deadline from November 2015 to April 30, 2016, in favor of Meralco.