Supply deals are for long-term power needs, Meralco claims

by Myrna Velasco – May 4, 2016

from Manila Bulletin

Power utility giant Manila Electric Company (Meralco) indicated that its newly contracted 3,551 megawatts capacity will address the longer term needs of its service area and to underpin anticipated demand expansion of up to 3.7 percent.

Meralco senior vice president Alfredo S. Panlilio, who is also the company’s head of customer retail services, noted that the power supply agreements (PSAs) recently filed with the Energy Regulatory Commission (ERC) for approval “were based on Meralco’s long-term projections.”

He added that “electricity sales in its service area are expected to grow by a compounded average growth rate of 3.6 to 3.7 percent.”

Panlilio similarly asserted that they kept in mind “the least cost mandate’ vested upon off-taker power utilities in signing up the seven power supply pacts with various power generators, including affiliate generation company-developers.

He stressed that part of the capacities under the new PSAs will also cover for contracts that are already due to lapse around 2019 to 2020.

In view of such developments, Panlilio said “there is a pressing need for Meralco to source additional capacity through bilateral power supply contracts.”

On the “least cost manner of supply procurement” though, the power distribution firm has not provided any reference or comparative figures.

Panlilio just intimated that “following extensive negotiations, Meralco executed said PSAs with different power suppliers for the purchase of up to 3,551MW of contract capacity and associated energy from new power plants, which are anticipated to begin commercial operation by year 2020.”

The only exception to it would be the Panay Energy Development Corporation (PEDC) facility which is being required to deliver starting capacity of 28MW by September this year.

If the mandatory retail competition and open access will already be enforced next year, the portion of Meralco customers that will be served with its contracted capacity will be its ‘captive end-users” which are generally residential subscribers.