Meralco, Therma Mobile seek ERC okay to amend power-supply deal

by Lenie Lectura, January 22, 2015
from BusinessMirror

THE Manila Electric  Co. (Meralco) and Therma Mobile Inc. (TMO), a subsidiary of Aboitiz Power Corp., are seeking approval from the Energy Regulatory Commission (ERC) to amend their power-supply agreement to best serve the interest of consumers. The amended agreement, they said, “reflects an increase in the maximum monthly capacity” that will result in savings for the consumers.

“The effective rate under the amended agreement for the month of April is simulated to be P9.3964 per kilowatt hour [kWh]. This is P0.8394 per kWh lower than the rate under the agreement. Further, should the amended agreement be approved, the impact to Meralco’s blended generation charge will be a decrease of about P0.0538 per kWh,” Meralco said.

Meralco and TMO said their amended agreement will lessen the former’s exposure to the Wholesale Electricity Spot Market (WESM), especially during peak hours of the summer months of 2015, during which, based on the power situation outlook of the National Grid Corp. of the Philippines (NGCP), the reserve capacity will be below the required contingency reserves due to the scheduled maintenance shutdowns and forced outages of major baseload coal-and-gas fired power plants in Luzon.

“The combination of these events will put much strain on the supply side that will likely drive the market price into very high levels, probably resulting to price shocks on Meralco’s end-users, if not result in disruption of power supply during period of unexpected outages or system failure,” they said.

The amended agreement will greatly help in providing more reliable and quality electricity to end-users as it will contribute in Meralco’s voltage improvement and will relieve its transformer capacity at its delivery points in Balintawak, Duhat, Paco.

There will also be no additional burden on the customers in terms of NGCP transmission charges considering that the power barges are embedded within Meralco’s franchise.

“There is, indeed, paramount relevance and necessity to immediately implement the amended agreement in order to ensure continuous and reliable electricity for Meralco’s customers. The implementation of which will clearly redound to the benefit of the end-users,” Meralco and TMO said.

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