Meralco rebuts DOE claim power supply deal delays pushed up electricity prices

Manila Electric Co. (Meralco) has strongly rejected claims from a senior Department of Energy (DOE) official linking the delayed implementation of its Power Supply Agreement (PSA) with Excellent Energy Resources Inc. (EERI) to higher electricity prices in the Wholesale Electricity Spot Market (WESM).

Insider spotlight:

• Meralco denies PSA delays with EERI caused high spot market prices.
• Cites plant outages and lack of capacity as main price drivers.
• Says PSA includes customer protections against delay costs.
• Rebuts DOE’s claim that EERI supply is more expensive.
• Urges focus on systemic issues affecting supply stability.

The utility responded to statements made by DOE Assistant Secretary Mario Marasigan, who suggested that Meralco’s PSA with EERI involved costlier power and contributed to the elevated spot prices.

“These statements are false and misleading,” Meralco said. “The high WESM prices cited by Asec. Marasigan are due largely to the simultaneous outages of several power plants, rather than the delayed implementation of Meralco’s PSA with EERI.”

Meralco also explained that in the event of an unexcused delay in the PSA’s implementation, customers are protected. “Meralco will only have to pay the lower of the actual cost of the replacement power and the PSA rate approved by the Energy Regulatory Commission (ERC),” it said.

The utility emphasized that while EERI’s commercial operations have been delayed, these issues have minimal impact on grid reliability compared to the broader lack of baseload capacity.

Meralco reiterated that power supply problems must be addressed through capacity expansion, not misplaced blame.

— Edited by Daxim L. Lucas