Regulators’ approval sought in SMC, Pampanga power co-op supply deal

by Lenie Lectura, 04 March 2015
from BusinessMirror

SAN Miguel Energy Corp. (SMEC) and Pampanga II Electric Cooperative Inc. (Pelco II) are asking the Energy Regulatory Commission (ERC) to approve their five-year power-supply agreement.

A power-supply contract was signed between SMEC and Pelco on December 11, 2014. Under the contract, SMEC will supply the power requirements of Pelco II which, in turn, supplies electricity in the municipalities of Pampanga, such as Guagua, Bacolor, Porac, Sasmuan, Lubao, Santa Rita and in the city of Mabalacat.

However, they need to seek approval from the ERC before they can implement the contract.  “The contract shall take effect on the date of ERC’s final approval and shall remain effective up to five years but not beyond December 25, 2019,” Pelco II and SMEC’s 14-page application stated.

The contract capacity is fixed on a monthly basis. The extension of the contract, if desired by both parties, shall be subject to a written agreement. “After deliberation and evaluation of terms, Pelco II has deemed that the offer of SMEC is the most advantageous and beneficial for its consumers, and, therefore, executed this power supply contract. This is also in consideration of the business relationship Pelco II has with SMEC since November 2009 as its successor generation company and up to this present,” said Pelco II.

SMEC is an independent power producer administrator (Ippa) of the 1,000-megawatt Sual coal-fired thermal power plant under the Ippa agreement executed with the Power Sector Assets and Liabilities management Corp.