THE Department of Energy (DoE) has raised concerns over the delays in bringing Manila Electric Co.’s (Meralco) 1,200-megawatt (MW) Batangas gas-fired power plant to its full capacity.
In a virtual briefing on Monday, Energy Assistant Secretary Mario C. Marasigan said not all units of the gas-fired power plant of Excellent Energy Resources, Inc. (EERI) are in full commercial operation.
“These units are still under testing and commissioning. They were supposed to deliver last year. Per my understanding of the power supply agreement, delivery of the kilowatt hours should start by August, but full capacity should have been made available by December 2024,” he said.
EERI was a winning bidder during the competitive selection process (CSP) conducted by Meralco last year. The power generator offered 1,200 MW out of the required contract capacity of 1,800 MW. It will deliver electricity from its 1,275-MW combined cycle power project in Ilijan, Batangas.
EERI, along with South Premiere Power Corp. (SPPC), are jointly owned by Meralco PowerGen Corp. (MGen), Abitiz-controlled Therma NatGas Power, Inc. (TNGP), and San Miguel Global Power Holdings Corp. (SMGP).
MGen and TNGP, along with SMGP, acquired the Batangas liquefied natural gas (LNG) import and regasification terminal owned by Linseed Field Corp. (LFC), which will “process, handle, and deliver the LNG requirements of the power plants of SPPC and EERI.”
Earlier this year, these firms signed a $3.3-billion deal to launch the country’s first integrated LNG facility.
“Now, if the facilities are still under testing and commissioning, then that’s one of our concerns because even if there is replacement power, that means that the capacity that they will secure to fulfill that 1,200 MW will be coming from existing facilities, which should be serving different markets,” Mr. Marasigan said.
He said that the DoE is also monitoring the source of the natural gas which is primarily LFC’s LNG facility.
Initially targeted for operations by May 15, he said that the completion of the facility’s storage Unit 1 may be pushed back to the end of the month.
“Our concern is without the fulfilment of the power supply agreement (PSA) of Meralco and EERI, then there is a gap. Instead of having a fully contracted capacity, then these capacities that are lacking under the PSA will have to be sourced from other generating facilities,” Mr. Marasigan said.
Energy Undersecretary Felix William B. Fuentebella has also reminded other distribution utilities to comply with the timelines in their contracts.
“We want to prevent any problems either with the regulator and especially the inconvenience that this may bring to consumers considering that prices may be affected by delayed delivery in accordance with the contract,” he said.
Asked to comment, Monalisa C. Dimalanta, chairperson and chief executive officer of the Energy Regulatory Commission (ERC), said that the agency has only issued provisional approvals for the natural gas PSAs of Meralco.
“All these issues, including the delay in completion of the gas terminal, will factor into the Commission’s final evaluation of the cases,” she said.
Ms. Dimalanta said that the ERC is still waiting for a copy of the “analysis and decision on the ownership issue” from the Philippine Competition Commission to complete the evaluation.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera