Aboitiz: Supply not a problem

The 300-megawatt emergency power supply agreement between Aboitiz-owned GNPower Dinginin Ltd. and the Manila Electric Co. ended yesterday, but the Aboitiz group said it will keep its door open for a new supply deal.

Maintaining an emergency PSA while the Court of Appeals resolves the legal action that San Miguel Corp. filed against the Energy Regulatory Commission would ensure monthly bills remain low, energy sector experts have previously said

The temporary restraining order the CA issued in SMC’s favor effectively gave its energy unit SMC Global Power a free hand to suspend its supply deal with Meralco, observers noted.

Without an emergency PSA, the Manny V. Pangilinan-led power distributor will be forced to source power directly from the Wholesale Electricity Spot Market where prices go up parallel to rising demand.

On Wednesday, Aboitiz Power Corporation signified its interest to join any “reasonable” competitive selection process that the power distributor will hold moving forward to meet its power requirements.

“We confirm the end of our 30-day EPSA with Meralco. We remain grateful for the opportunity to contribute to the delivery of a much-needed energy supply covering the Meralco franchise,” AboitizPower said.

“(If) Meralco launches another competitive selection process, where the terms of reference will be reasonable, AboitizPower will certainly participate,” it added.

Under the deal, which took effect last 15 December, 300 megawatts of power was derived from the new 1,336-MW GNPower Dinginin Plant in Mariveles, Bataan with a fixed price of P5.95 per kilowatt-hour.

TRO results in a shortfall

The emergency PSA partially replaced the 670 MW capacity under San Miguel’s agreement with South Premiere Power Corp., which was suspended through the TRO issued by the Court of Appeals.

It can be recalled that the Energy Regulatory Commission also called out the suspension of the PSA, which it said will instantaneously expose approximately 7.5 million registered Meralco consumers in Metro Manila, Central Luzon, and Calabarzon to higher electricity prices.

The regulatory body said the fixed price PSA of Meralco with SPPC covers 670MW of supply. The other fixed-price PSAs shielded Meralco consumers for the past several months from the volatility of costs from the Spot Market and automatic fuel pass-through PSAs.

The ERC said the cessation of the PSA effectively set aside the required proper observance of the terms of the PSA.

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