The Energy Regulatory Commission (ERC) said Tuesday it denied the application of power retailer Manila Electric Co. (Meralco) and Masinloc Power Co. Ltd. (MPCL), a unit of San Miguel Corp., for a provisional authority approval of their power supply agreement due alleged to lack of urgency.
The ERC said that after due deliberation, it determined that while the competitive selection process (CSP) conducted by Meralco and MPCL is compliant with the 2023 DOE CSP circular and the applicable resolutions by the commission on CSP, their petition is premature.
“Considering that the expected delivery date of the instant PSA shall not occur until 26 August 2025, the urgency of supply from MPCL has not been established. In this regard, the commission deems it premature to grant a provisional authority to the applicants. Thus, the application for provisional authority and/or interim relief by Meralco and Masinloc Power Co. Ltd. is hereby denied,” it said.
MPCL won the bid to supply Meralco 500 MW of baseload capacity in August and executed a 15-year PSA.
MPCL owns and operates units 3 and 4 (undergoing construction) of the Masinloc coal-fired power plant in Barangay Bani, Masinloc, Zambales, capable of supplying 500 MW.
MPCL submitted a total levelized cost of energy rate of P5.6015 per kilowatt-hour, inclusive of line rental cost and value-added tax. MPCL’s offer is lower than the P7.2609 per kWh reserve price set for the bidding.
“The Meralco-MPCL PSA can help shield Meralco’s customers from the looming supply deficiency because of the supply availability under the Meralco-MPCL PSA is guaranteed 100 percent and no outage allowance is provided herein,” the parties said in its application to the ERC.
They said the PSA reflects the most beneficial generation charges with resultant estimated rate reduction of P0.2508 per kWh.
The parties said the grant of provisional authority to implement the PSA “will not only avert the situation where Meralco would be constrained to source its capacity from the WESM, thereby exposing its customers to volatile prices, but more importantly…would redound to the best interest of electric power customers since aside from the very competitive rate, the supply availability under the Meralco-MPCL PSA is guaranteed 100 percent and no outage allowance is provided herein.”
Meralco said it conducts its CSP in full compliance with the rules and regulations issued by the Energy Regulatory Commission (ERC) and the Department of Energy (DOE).
“The CSP ensures an open and transparent process that ensures and fairness and integrity,” Meralco head of utility economics Lawrence Fernandez said earlier.
Meralco is the country’s biggest power retailer with eight million subscribers in its franchise area. It conducts a CSP to procure adequate supply at least cost to its consumers.
