The Energy Regulatory Commission (ERC) has granted provisional approval for the power supply agreement (PSA) between Manila Electric Company (Meralco) and South Premiere Power Corporation (SPPC), a subsidiary of San Miguel Corporation. The approval, issued on May 9, 2024, allows Meralco to secure a supply of 910 megawatts (MW) from SPPC’s Ilijan Natural Gas Plant at a base rate of P5.9282 per kilowatt-hour (kWh).
Meralco had previously announced in January that SPPC was the lowest bidder for the 1,200-MW, 15-year PSA. However, the ERC noted that 290 MW of this capacity remains contracted under an earlier mid-merit supply agreement between Meralco and SPPC, which expires in December 2024. The existing contract had been approved at a rate of P5.1363 per kWh.
The ERC’s provisional approval underscores the importance of this deal in ensuring a stable power supply for Meralco, which serves millions of customers in the Philippines. This development is seen as a crucial step towards addressing the country’s growing energy demands and preventing potential power shortages.
“We have carefully evaluated the agreement and believe it will help in stabilizing the energy supply while providing a fair price to consumers,” an ERC spokesperson stated.
In a broader context, this approval aligns with the Philippine government’s ongoing efforts to enhance energy security and support sustainable growth in the energy sector. The move is also expected to contribute to the country’s economic resilience by ensuring reliable power supply amid increasing industrial and commercial activities.
Meralco’s collaboration with SPPC is particularly significant given the current energy landscape in the Philippines, where balancing supply and demand is a constant challenge. The strategic use of natural gas, considered a cleaner alternative to coal, is also in line with the nation’s environmental goals.
While this approval marks a positive step forward, it also highlights the complex regulatory environment governing the energy sector. The ERC’s role in scrutinizing and approving such agreements is critical to maintaining a fair and competitive market.
Looking ahead, both Meralco and SPPC are expected to comply with regulatory standards and continue their efforts to provide efficient and sustainable energy solutions. The provisional nature of the approval suggests that further evaluations and adjustments may be necessary to address any emerging issues and ensure long-term viability.
As the energy sector evolves, stakeholders will be watching closely to see how this partnership unfolds and contributes to the broader goals of energy security and economic stability in the Philippines. The successful implementation of this agreement could set a precedent for future collaborations and investments in the energy sector, fostering innovation and efficiency.
In conclusion, the ERC’s provisional approval of the Meralco-SPPC power supply deal is a significant milestone in the Philippine energy landscape. It promises to enhance the stability and sustainability of the country’s power supply, benefiting both consumers and the economy.
