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3:19 pm on 27 October 2022, Thursday
The Manila Electric Company (Meralco) executed a 20-year Power Supply Agreement (PSA) with Terra Solar Philippines for the supply of 850 megawatts (MW) of renewable energy to cover the power distributor’s mid-merit requirement starting 2026.
The PSA provides that a total of 600 MW of power supply will be available by February 26, 2026, Meralco said in a statement.
Meanwhile, an additional 250 MW will be delivered starting February 26, 2027 at a headline and levelized cost of electricity (LCOE) rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.
“The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing,” said Atty. Jose Ronald V. Valles, Meralco FVP and Head of Regulatory Management.
“This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” Valles added.
“In addition, this PSA forms part of our compliance to the Department of Energy’s (DOE) Renewable Portfolio Standards policy and at the same time cements our commitment to source up to 1,500 MW of our power requirements from renewable energy,” he concluded.
The PSA, based on the Terms of Reference earlier approved by the DOE, will be filed with the Energy Regulatory Commission and will be subject to regulatory proceedings and approval before implementation.
The signing of the PSA serves as the culmination of the competitive challenge for Terra Solar’s unsolicited proposal.