Meralco to source electricity from Aboitiz Power units

MANILA, Philippines - Manila Electric Co. (Meralco) is sourcing electricity from two subsidiaries of Aboitiz Power Corp. for the next six months.

In a disclosure, the country’s largest power distributor said it is seeking the Energy Regulatory Commission’s approval for these two short-term supply deals.

“The power supply agreements were executed to cover the volume needed by Meralco during the six-month transition period before the start of the commercial operations of retail competition and open access (RCOA),” Meralco said.

Under the RCOA, customers can freely choose their electricity service provider. This means that electricity end-users with an average monthly peak demand of one megawatt – the “contestable customers” – can choose from whom to procure their electricity service.

Under the supply deal, the distribution utility will source electricity from Therma Luzon Inc. and AP Renewables Inc. for six months from the expiration of the transition supply contract (TSC) up to June 25, 2013.

The TSC is a temporary power supply deal between power distributors and state-owned power plants that will be subject to privatization.

Therma Luzon manages the output of the 735-megawatt (MW) Pagbilao coal-fired plant in Quezon province while AP Renewables owns and operates the Tiwi geothermal power plant in Albay and the MakBan geothermal project in Laguna with a combined generating capacity of 747 MW.

To provide for the growing electricity needs of its customers, Meralco signed new power supply agreements with generators. It will also ensure that Meralco will rely less on expensive electricity in the Wholesale Electricity Spot Market.

The new supply deals, together with Meralco’s other bilateral contracts, account for about 95 percent of the requirements of Meralco customers in 2013.

Specifically, power supply agreements were already signed with Consunji-led SEM-Calaca Power Corp., Masinloc Power Partnerss Co. Ltd., South Premiere Power Corp. and San Miguel Energy Corp.