ERC okays Meralco supply deal with power company

MANILA, Philippines – The Energy Regulatory Commission (ERC) has allowed Manila Electric Co. (Meralco) to enter into a supply contract with Montalban Methane Power Corp.

In its decision, the ERC justified the supply contract as a measure to bring down power rates.

Early this year, Meralco agreed to purchase electricity from Montalban Methane’s 8.19-megawatt methane power plant in Rodriguez, Rizal as part of the power utility firm’s effort to promote the use of renewable energy sources.

“Transmission charges and losses will be avoided as the plant itself is imbedded by nature. The said plant will provide voltage support to Meralco’s distribution system thereby reducing system losses,” the ERC said.

In approving the supply contract, the ERC noted that the deal conforms to the National Government’s program to promote the use of renewable energy to address various environmental concerns such as garbage disposals, greenhouse gas emissions and global warming.

“The commission is mandated to protect the interest of the consumers insofar as they are affected by the rates, particularly in the light of the pervading financial crisis,” it said.

Montalban Methane is a joint venture between Tranzen Group Inc. owned by Salvador Zamora II (60 percent) and Carbon Assets Fund of Cayman Island, a majority-owned company of UK-based Carbon Capital Markets (40 percent). 

Meralco sources its power requirements mainly from National Power Corp. (Napocor) plants, the wholesale electricity spot market and its own independent power producers such as Quezon Power Philippines Ltd. and First Gas Power Corp.

The Montalban power plant, estimated to cost around P1.5 billion, will recover harmful methane gas from the Rodriguez garbage dumpsite to generate electricity, enabling the company to increase its capacity and alleviate global warming through the reduction of carbon emissions during electricity generation.

According to Montalban Methane officials, it plans to sell power to Meralco starting at two MW. 

Meralco president Jose de Jesus said they are willing to buy more power from the Montalban power plant.

Based on its medium-term plan, Montalban Methane will increase the capacity of the power plant to 15 MW in the next five years.

Montalban Methane plans to develop similar methane said it projects in four other sites in the Philippines: Angeles City, Olongapo City, Davao City and San Mateo, Rizal. 

The municipality of Rodriguez in Rizal Province contracted Montalban Methane to build and operate the landfill gas-to-power facility in the Montalban landfill which hosts around 1,500 tons of garbage a day. – Donnabelle L. Gardula