Meralco power supply deals still being evaluated by ERC

MANILA, Philippines — The Energy Regulatory Commission (ERC) is still scrutinizing the power supply agreements (PSA) of Manila Electric Co. (Meralco) three months after it promised a decision on the power deals.

The ERC said the Meralco PSAs are still being evaluated to ensure only just and reasonable costs will be included in the electric bill.

Citing Section 45 of the Electric Power Industry Reform Act (EPIRA) of 2001, the power regulator said it is mandated to review bilateral power supply contracts entered into by distribution utilities.

“We are carefully scrutinizing each of the cost components in the Meralco PSA applications, that is why the final approval of these applications have been taking some time,” ERC officer-in-charge Alfredo Non said.

The ERC’s PSA approval entails a comprehensive process, which include the conduct of the hearing process, filing of formal offer of evidence, technical evaluation, commission deliberation and issuance of a decision.

In April 2016, Meralco filed seven PSAs with the ERC, involving total supply of 3,551 megawatts (MW) from generation plants mostly owned or partly owned by Meralco through its power generating unit Meralco PowerGen Corp.

Out of the seven PSAs, its contract with Panay Energy Development Corp. (PEDC) was given provisional authority in July 2016.

Non said the provisional authority granted to PEDC was needed in view of the frequent yellow alert status of power reserves at that time.

“We must remember that stable supply of power is among the anchors of our economy,” he said. “We granted the provisional approval because it will be more beneficial to the consuming public, and the country as a whole, to have a continuing stable power supply than have rotating brownouts which is more damaging to the economy.”

Under the ERC’s Rules of Practice and Procedure, provisional authority or interim relief may be ordered by the power regulator with or without hearing.

The ERC shall act on the motion on the basis of the allegations of the application and supporting documents and other pieces of evidence that applicant has submitted and the comments or oppositions filed by any interested person, if there is any.

In a congressional hearing last July 4, the ERC vowed to act on the power supply contracts applied for by Meralco in three months, a working target the power regulator will try to meet, Non said at that time.