ERC upholds CSP, okays Meralco PSAs

The Energy Regulatory Commission (ERC) has allowed Meralco to implement the rates applied for its supply deals with Gigasol 3, Inc. and San Roque Hydro, Inc. (SRHI), after finding these compliant with the rules.

Speaking at an Energy Forum hosted by the Economic Journalists Association of the Philippines in Makati on Thursday, ERC Chairperson and CEO Atty. Francis Saturnino Juan said the approval will help stabilize electricity costs for consumers. 

The decision notably shifted from an earlier provisional ERC ruling that had set lower fixed charges for the power deals.

“These two contracts are products of a competitive selection process. We took a look at the process undertaken by Meralco, and it complied with every requirement under the CSP policy and rules of the ERC,” Juan said.

He explained that the commission’s decision was anchored on the results of the bidding. 

“The final decision that we rendered, we based it on the applied rates and the rationale being that this was already the product of the competitive selection process,” he added.

According to Juan, the winning offers were also aligned with prevailing market levels. “We took a look at the CSP rates or the outcome plus benchmarked it with other suppliers, and we determined that compared with the rates of the other approved suppliers for that product, the mid-merit supply, these proposed rates from SRHI and GigaSol are comparable, in fact, even lower,” he noted.

The ERC has already promulgated its decision, leaving the schedule of supply delivery to Meralco and its counterparties. “It’s up to the parties already to schedule when the delivery will commence,” Juan said.

To recall, SRHI submitted the lowest bid at P7.10 per kilowatt-hour (kWh) for 340 MW, followed by Gigasol 3, Inc. at P8.1819 per kWh for 139 MW, and Santa Cruz Solar Energy, Inc. at P8.1998 per kWh for 21 MW. All bids came in below the reserve price of P8.2380 per kWh.

The 10-year PSAs will supply Meralco’s 350-MW mid-merit requirement starting February 2025, with an additional 150 MW to be delivered beginning February 2026.

Previously, under then-ERC Chairperson and CEO Monalisa C. Dimalanta, the commission provisionally approved a fixed rate of P5.1908 per kWh for San Roque Hydro and GigaSol3—significantly lower than the rates set in their PSAs. 

At the time, Dimalanta explained that the rate reflected the average cost of other mid-merit supply to Meralco and that the higher bid rates, along with Meralco’s reserve price, would still be subject to further evaluation before final authority was granted.