GNPower Dinginin Ltd. Co. (GNPD), a partnership of Aboitiz Power’s Therma Power Inc., Ayala Corporation’s AC Energy Holdings, Inc., and Power Partners Ltd., is negotiating for its third emergency power supply agreement (EPSA) with Manila Electric Company (Meralco) following the lapse of their second contract last February.
The company indicated that since the expiration of that second contract, which was declared by Meralco to have a price of P8.5250 per kilowatt hour (kWh), GNPD had ceased supplying power to Meralco since February 25 and that stays until now.
“The talks are ongoing and the details, including the final contract pricing, are yet to be finalized,” said GNPD, of which operation is supervised by Aboitiz Power among the partner-entities.
As reiterated by GNPD President and CEO Dennis Jordan, “negotiations are still underway between GNPD and Meralco on a new emergency power supply agreement, and that currently, we have stopped serving the EPSA which expired last February 25.”
On the P8.5250 per kWh charge in their second contract stretching from January 26-February 25, GNPD claimed that such included “line rental costs and value added tax (VAT),” and had also echoed Meralco’s earlier statement that it has “a fuel pass through rate structure.”
The company added “the expiration of this second EPSA led to dialogues for a new contract to continue the partial replacing of 670-MW that is the subject of an ongoing legal proceeding.”
The Aboitiz-affiliated company further stated that “while GNPD made an initial offer of 300-MW fixed rate for a new EPSA with MERALCO, it was rejected by the distribution company.”
According to Meralco, that second price offer for a fixed price contract was rejected because it was higher than the P8.5250 per kWh that the parties had agreed upon in their second contract.
When asked if the billing for the second EPSA ended up lower or higher than P8.5250 per kWh, sources from Aboitiz Power conveyed that calculations are still being finalized and the invoice was not sent to Meralco yet.
GNPD further acknowledged that the first EPSA from December 15, 2022 to January 25, 2023 was a fixed price contract – and Meralco earlier emphasized that the charge for that was P5.95 per kWh.
The targeted third EPSA for the Dinginin plant – that may also cover 300MW capacity – is being depended upon by Meralco as part of its supply portfolio during the summer months, although the utility firm indicated that they are negotiating for a cheaper price.
Pricing for power supply agreements (PSAs) with Meralco, especially if these are costly, have been igniting agitation from consumers – especially so since many households are still reeling hard from budgetary pressures of rising inflation, hence, it is very crucial for power utilities to secure ‘least cost contract’ from their power suppliers.
The 1,336-megawatt Dinginin coal-fired power plant currently stands as the biggest thermal facility in the Luzon grid, if based on its per unit capacity of 668MW capacity each.