Meralco’s sees P11.8B savings from new supply deal

Manila Electric Co. (Meralco) is seeking the Energy Regulatory Commission’s (ERC) go signal for its power supply deals with units of Aboitiz Group and San Miguel Corp., as these can result in more than P11.75 billion in consumer savings, shielding customers from the volatile electricity spot prices.

In filings posted on the ERC’s website, Meralco formally sought ERC’s approval for agreements with Aboitiz’s GNPower Dinginin Ltd. Co. and San Miguel Global Power Holdings Corp.’s Masinloc Power Co. Ltd.

The deal with GNPower Dinginin involves 100 megawatts (MW) while that with Masinloc Power is for 500 MW. The Manuel Pangilinan-led group earlier said it needed to procure additional capacity for next year as it projects a 600-MW deficit in its portfolio.

In the applications, Meralco said its franchise areas could get a relief of about P9.951 billion as Masinloc Power’s committed rate of P5.0107 per kilowatt hour (kWh) was cheaper by P2.2719 per kWh if the supply were to be sourced from the Wholesale Electricity Spot Market (WESM).

For the contract with GNPower Dinginin, Meralco said consumers could save about P1.81 billion as the rate promised by the supply was also lower by more than P2 per kWh when compared to WESM prices.

The distribution giant said the supply deals could “shield Meralco’s customers from the looming supply deficiency because the supply availability under the PSA is guaranteed 100 percent and no outage allowance is provided therein,” the document read.

The 600 MW committed supply is scheduled for delivery by August 2025, Meralco earlier said. The engagement is for 15 years.

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Meralco said that the recent bidding was “an open and transparent process that ensures fairness and integrity.”

Jose Ronald Valles, Meralco senior vice president and head of regulatory management, earlier said that it was part of Meralco’s mandate to “conduct these in a timely manner,” noting a delay could result in “billions of pesos in the form of higher power rates.”

Meralco’s franchise area covers Metro Manila, Bulacan, Cavite, Rizal, and select areas in Pampanga, Laguna, Batangas and Quezon.