ERC Statement on SPPC Cessation of Supply to MERALCO
As of noon today, 07 December 2022, the Energy Regulatory Commission (ERC) has not received any official communication from the Manila Electric Company (MERALCO) on the reported cessation of supply of 670MW committed under the Power Supply Agreement (PSA) with South Premiere Power Corporation (SPPC). “It is not yet clear to us at this point,
” according to ERC Chairperson & CEO Atty. Monalisa Dimalanta, “if SPPC served a notice of PSA termination or merely a suspension of supply considering that the case before the Court of Appeals filed by SPPC involving the said PSA is still for final resolution
The ERC also awaits action by the agency’s statutory counsel, the Office of the Solicitor General (OSG), after the matter was referred for undertaking the appropriate legal remedy.
Based on ERC records of MERALCO billings for November 2022, the 670MW SPPC PSA accounted for 13.4% of MERALCO supply and priced at P4.2455/kWh. Average WESM price for the same period was at P8.47/kWh.
The cessation of supply from a bilateral contract or PSA does not excuse the distribution utility from its obligation under Section 23 of Republic Act No. 9136 or EPIRA “to supply electricity in the least cost manner to its captive market…
” The matter of termination of the SPPC PSA, with the grounds, procedure and timelines all provided in the contract, were discussed extensively by the Commission as it noted the Manifestation filed by MERALCO on the day after it received the Notice of Termination from SPPC in 4 August 2022.