The interim power supply agreement between the Aboitiz Group and the Manila Electric Co. (Meralco) ended on Wednesday, forcing the power distributor to source additional electricity elsewhere at even higher prices.
“We confirm the end of our 30-day emergency power supply agreement (Epsa) with Meralco takes effect today, Jan 25, 2023,” Aboitiz Power Corp. said in a statement.
AboitizPower signified its interest in sealing a longer supply contract with Meralco in the future.
“In the event that Meralco launches another competitive selection process, where the terms of reference will be reasonable, AboitizPower will certainly participate,” it added.
The Epsa between Meralco and GNPower Dinginin Ltd. forged last Dec. 15, 2022 covered 300 megawatts (MW) of baseload capacity or the minimum power injected into the grid.
It was sourced from the 1,336-MW coal-fired power plant of GNPower in Mariveles, Bataan. GNPower is a partnership among the Aboitiz and Ayala groups and Power Partners Ltd. Co.This partly covered the 670-MW supply deal of Meralco with conglomerate San Miguel Corp.’s power subsidiary which the appellate court suspended in November last year.
Following the lapse of their emergency supply deal, Meralco has started to secure the entire 670 MW of electricity from the Wholesale Electricity Spot Market, the central venue for trading electricity.
Power market prices
According to WESM operator Independent Electricity Market Operator of the Philippines, prices at the energy bourse hit P5.54 per kilowatt-hour (kWh) as of Jan. 22 this year. It was slightly lower than GNPower’s fixed rate of P5.96 per kWh around the time the Epsa was signed yet higher than the contract price of P4.0056 per kWh under the 2019 power supply agreement of Meralco and South Premiere Power Corp.
The suspension of the Meralco-SMC supply agreement came after the South Premiere Power —a unit of SMC Global Power Holdings Corp.—scored a 60-day temporary restraining order from the Court of Appeals.
South Premiere Power had turned to the court as the Energy Regulatory Commission rejected the joint petition for a rate hike as it has been grappling with skyrocketing coal and fuel prices due to the ongoing Russian invasion of Ukraine. INQ
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