MANILA - Meralco has begun implementing an emergency power supply agreement (EPSA) with an energy subsidiary of San Miguel Corp, the company said on Wednesday.
Meralco said the deal with South Premiere Power Corporation, a unit of SMC Global Power, is for the supply of 300 megawatts of baseload capacity from March 26, 2023 until March 25, 2024.
The power distributor said the Department of Energy exempted the deal from Competitive Selection Process (CSP), thereby allowing its immediate implementation.
“The EPSA reflects a two-part tariff composed of a P1.75 per kWh fixed cost and variable cost indexed on fuel price movements,” Meralco said.
The deal will help shield electricity consumers from volatile and potentially higher generation costs in the Wholesale Electricity Spot Market, Meralco said. Power costs historically rise during the dry season when power demand spikes, it noted.
Meralco said it has also sought the DOE’s approval for another EPSA to cover 180-MW and help address the reduced capacity from the continued Malampaya gas supply restriction.
The 180-MW supply deal had been seen two rounds of bidding, which both failed due to lack of bidders, it said.
“Given the urgency of the additional supply for the dry season, Meralco sought approval to execute an EPSA instead.”
The country’s power grid operator earlier warned that power reserves were “thin” for the dry season.
The National Grid Corporation of the Philippines said possible power interruptions loom after the ERC denied its request for the extension of its month-to-month ancillary service agreements while the competitive selection process is ongoing.