Meralco: Consumers save P3.88 billion from new power deal

February 26, 2025 | 12:00am

MANILA, Philippines — Power distributor Manila Electric Co. (Meralco) is seeking regulatory approval for an emergency power supply agreement (EPSA) that could unlock P3.88 billion in savings for consumers.

Following the termination of its 200-megawatt (MW) supply deal with ACEN Corp., Meralco sought an alternative solution by negotiating an EPSA to secure its baseload requirement.

“Last Nov. 2, ACEN ceased supplying to Meralco, covering 200 MW of its baseload capacity under the PSA that was signed last Sept. 30, 2019,” Meralco senior vice president and head of regulatory management Jose Ronald Valles said.

Given the baseload capacity shortfall, Valles said Meralco informed the Energy Regulatory Commission (ERC) of the urgent need to secure new supply, soliciting proposals from different power suppliers.

Sual Power Inc. (SPI), a subsidiary of tycoon Ramon Ang’s San Miguel Global Power, bested five other suppliers after offering the lowest contract price of P5.05 per kilowatt-hour plus a P0.10 line rental cap.

“This is a guaranteed supply without any outage allowance. Due to the urgency, parties already implemented the EPSA starting Jan. 26, 2025. The application is currently undergoing pre-filing with the ERC,” Valles said.

Under existing rules, the EPSA “shall be immediately implementable” without the need for a provisional authority and interim relief, provided that certain conditions are met.

In a regulatory filing, Meralco said the urgent power deal would ensure “continuous and reliable” electricity supply to its customers, especially during the summer months.

Meralco said the delivered rate of P5.15 per kWh through the EPSA is way lower than the effective cost of P7.3781 per kWh, which would have been the price if the equivalent capacity had been sourced from the power spot market.

“In fact, by sourcing the capacity through the Meralco-SPI EPSA, Meralco’s average blended generation rate will be reduced by about P0.1012 per kWh, resulting in savings to consumers of about P3.882 billion,” it pointed out.

With regard to its terminated PSA with ACEN, Meralco said the cessation of supply is “an extraordinary event, which, though foreseen, is inevitable and independent” of its involvement.

The termination followed Meralco and ACEN’s joint motions for price adjustment before the ERC, citing losses incurred due to a change in circumstances. However, the case remained unresolved despite efforts from both parties.

Meralco is the country’s largest private distribution company, providing electric service to at least eight million customers in Metro Manila and nearby provinces.