MANILA, Nov. 26 (PNA) — The Manila Electric Company (Meralco) has signed a Power Supply Agreement (PSA) for 50 Megawatts (MW) with Energy Development Corporation’s (EDC’s) Bacman Geothermal Inc (BGI).
”BGI shall supply Meralco with 50 MW of power from the Bacman Power Plants over a term of five years extendible by an additional two years upon mutual agreement of the parties,” Meralco said in a disclosure with the Philippine Stock Exchange (PSE) Wednesday.
However, the PSA will still have to be submitted to the Energy Regulatory Commission (ERC) for approval, according to Meralco. It includes the power rate.
Meralco added that the PSA was entered earlier to address the reserve shortage seen during the summer months 2015 and to minimize its exposure to the Wholesale Electricity Spot Market (WESM).
It noted that it was only one of its efforts to source additional capacities through interim bilateral contracts among power producers.
Thus, this will lessen the impact of the expected high rates during the summer season, since the supply had been signed and had been approved at certain rates beforehand.
Previously, Energy Secretary Jericho Petilla asked Meralco to find sources of supply for its franchise as early as June, to minimize the impact on consumers and to lessen the possibility of brownouts for next year’s loomed reserve shortage.
Meralco is the country’s largest distribution utility group, powering most of the homes in the grid, while EDC is the world’s largest geothermal energy company, with investments reaching other countries such as Peru, Chile and Indonesia.
Its local plants include the Bacman Geothermal Production Field, Mindanao Geothermal Production Field, Northern Negros Geothermal Production Field, Southern Negros Geothermal Production Field and the Leyte Geothermal Production Field. (PNA)