The Manila Electric Company (Meralco) will receive a power supply from Solar Philippines Tanauan Corporation.
This development comes following the Energy Regulatory Commission’s (ERC) clearing of the long-term power supply agreement (PSA) between the two firms.
Under the approved deal, Solar Philippines undertakes to provide Meralco electric energy in two locations.
For two decades, the company will generate this renewable power from its solar power plant.
Then, they will deliver it to the most significant power distributor in the Philippines.
Solar Philippines cited that among their first solar farms built are their initiatives in Naic, Cavite, and Tanauan, Batangas.
Moreover, they said that these projects were following the conclusion of the feed-in-tariff (FIT).
Solar Philippines remarked that these initiatives have a rate worth P8.69 per kilowatt-hour (kWh)
Plus, they were the first to get subjected to a competitive selection process (CSP).
The ERC had cleared the PSA between Solar Philippines and Meralco, as per the Philippine daily newspaper The Philippine Star’s report.
The commission completed this measure three years following the execution of the agreement.
The ERC’s decision indicated that it had given the green light for a final generation rate amounting to P5.39 per kWh.
As provided in the PSA, this price depends on a yearly escalation of two percent.
Moreover, the ERC found the final generation rate as logical because it is lower than P6.941 per kWh.
The latter is the rate’s calculated real cost generation rate. Solar Philippines and Meralco reportedly proposed the final generation rate.
This price underwent a CSP. Besides, it is below the prevailing solar FIT costs.
Previously, the ERC reportedly released an interim relief to Solar Philippines and Meralco.
The commission wanted the implementation of the PSA as its applied rate. However, it performed this measure, excluding the escalation cost.
Three years ago, Meralco expected a peaking capability shortage in its portfolio.
The firm foresaw this scenario, especially during the summer months, when there is usually a high demand for electricity.
Solar Philippines submitted an unsolicited offer to the power distributor. It aimed to fill the peaking supply deficiency.
In compliance with the CSP regulation, the proposal of Solar Philippines was conditional, depending on a price challenge.
Nevertheless, qualified price challengers did not materialize for two rounds. Hence, Meralco awarded the PSA to Solar Philippines.
The Manila Electric Company (PSE: MER) closed at P267.40 per share yesterday, Wednesday, March 4, 2020.
From its previous close, this last trade price Meralco shares of stock is up by P9.60 or 3.72 percent.
Furthermore, the total value turnover reached P69,062,774.00.
The 52-week high of the company is at P391.00, based on the figures that the Philippine Stock Exchange recorded.
Meanwhile, the 52-week low of the firm is at P255.20.
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