Meralco fears 900 MW supply cut in Oct.

Supply is always tight, so we need additional capacity

Meralco expects a 600 MW to 900 MW of supply cut in the first week of Malampaya’s offline schedule next month.

The maintenance shutdown of Malampaya natural gas field will result in the loss of up to 900 megawatts (MW) of power supply to Manila Electric Co. (Meralco), a high official said.

In a chance interview on the sidelines of a signing event in Pasig City on Monday, Meralco President Ray Espinosa said the company expects 600 MW to 900 MW of supply cut in the first week of Malampaya’s offline schedule next month.

“We have alerted the DoE (Department of Energy) already that there are scheduled outages in October, as early as the first week. We asked them actually to help us resolve the issue of water rights,” Espinosa said.

“There are several plants that will have their scheduled maintenance. We just have to be careful that the supply is there,” he added.

DoE Secretary Alfonso Cusi said at the start of the year that Malampaya will conduct a maintenance shutdown on its facility this October and it was working on ensuring that energy supply in the Luzon grid will remain sufficient.

The DoE has prepared for the scheduled offline as early as November 2018.

As contingency, Espinosa said Meralco has contracted Meralco PowerGen Corp.’s San Buenaventura 455-MW supercritical coal-fired plant, which is set to come online this month, to supply to the distribution utility giant.

“Supply is always tight, so we need additional capacity,” Espinosa said.

In a related development, (Meralco) on Monday signed five-year deals with three power generation companies over the supply of 500 MW of clean energy.

The three companies who bagged the bidding were First Gen Hydro Power Corp., Phinma Energy Corp. and South Premiere Power Corp. following the Supreme Court’s order to subject all power supply agreements to a competitive selection process (CSP).

Lopez-led First Gen Hydro’s contract entails a capacity of 100 MW of power, while the Ayala Group’s Phinma Energy committed 110 MW. South Premiere took up the remaining 290 MW.

The new batch was on top of the first 1,200 MW of brownfield capacity that was successfully bid out last week.

Meralco said that the contract signing will result in some P4.4 billion annual savings for the consumers in the next five years, not to mention that another P9.4 billion worth of annual savings are to be expected from the first CSP.

“This exercise has resulted in huge benefits again to Meralco customers,” Meralco President Ray Espinosa said in his speech during the signing event in Pasig City.

Meralco has so far auctioned off 1,700 MW of power supply contract, out of the 2,900 MW entailed in its first batch of CSP.

Espinosa said last week that the company will review the terms of reference for the remaining 1,200 MW for greenfield capacity amid calls from industry players to allow them to join through tweaking the TOR.

He said, however, that Meralco cannot adjust every term to consider all views from the prospective bidders.

Apart from the 2,900 MW of power, Meralco is also set to auction off this year another 1,500 MW of energy supply.