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THE Energy Regulatory Commission (ERC) has approved
the transition supply contract between the National Power Corp. (Napocor)
and the Manila Electric Co. (Meralco).
In a statement on
Wednesday, the regulatory body said it has given the provisional
authority for the five-year supply deal between the two parties. The
contract, which commenced from November 17, 2006 and would last
until 2011, guarantees Meralco and its electricity consumers a power
supply of 6,600 gigawatt-hours per year.
This supply contract allows
Meralco customers to benefit from a stable electricity price and
power supply under a competitive environment. However, the contract
will automatically expire at the end of the first year of existence
of open access, during which consumers may be allowed to choose
their own supplier.
“This is another significant
milestone in the power reforms of the Electric Power Industry Reform
Act [Epira] considering that said [contract] will help protect
Meralco customers against price fluctuations of the Wholesale
Electricity Spot Market,” Rodolfo B. Albano Jr., ERC chairman,
said.
Contract charges and adjustments
will be based on the ERC-approved Napocor time-of-use generation
rates, which are currently the lowest in the country. Meralco, at
its option, may source power from Napocor in excess of the contract
energy by not more than 20 percent. Any excess consumption will make
Meralco pay Napocor an additional premium over and above the agreed
contract energy charge plus other adjustments.
The ERC said it will issue its
final approval on the Napocor-Meralco supply deal upon completion of
the required final evaluation and public hearings.
--Euan Paulo C. Añonuevo
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