ERC welcomes NPC-MERALCO supply deal

The Energy Regulatory Commission (ERC) welcomes the forging of the National Power Corporation (NPC) and Manila Electric Company (MERALCO) of an electric power supply contract for the latter’s power requirements for the next five (5) years. “This supply contract, which is actually a Transition Supply Contract (TSC), required under Sec. 67 of R.A. 9136 (Electric Power Industry Reform Act [EPIRA]) had been long overdue and is crucial in ensuring a stable power supply,” ERC Chairman and CEO Rodolfo B. Albano, Jr. said.

The TSC, which was signed last November 16, 2006 by NPC President Cyril del Callar and MERALCO President Jesus P. Francisco, will be submitted to the ERC for approval. As provided in the contract, MERALCO will be guaranteed with a power supply of 33,188 GWh (gigawatt-hours) for five (5) years or about 6,600 GWh per year starting on 2007 until 2011. However, said TSC, consistent with the provisions of the Electric Power Industry Reform Act (EPIRA), will be terminated a year after the introduction of open access if the same occurs within the five-year period.

NPC is expected to file before the ERC its application for the approval of the said TSC anytime now. The ERC, on the other hand, will notify NPC of its approval of the rates contained in the said contract within six (6) months from the filing thereof.

“The presence of the said TSC is expected to work to the advantage of the electricity consumers for it will protect them from the volatile prices in the spot market as well as provide the assurance of a continuous and stable power supply of electricity, aside from contributing to the NPC privatization efforts. Rest assured that the ERC will fast track the issuance of its decision on the subject TSC once filed,“ Chairman Albano concluded.

November 29, 2006