SAN Miguel Energy Corp. (SMEC) and Clark Electric Distribution Corp. (CEDC) are asking the regulators to approve changes in their power supply agreement (PSA) and, at the same time, to issue a provisional authority (PA) so they can implement it prior to the scheduled shutdown of the Sual power plant.
SMEC is the independent power producer administrator of the 1,000-megawatt (MW) Sual power plant while CEDC is a distribution utility that supplies power within the Clark Special Economic Zone.
The customers of CEDC are mostly industrial locators that heavily rely on sufficient and steady supply of electricity at stable rates.
They already have an existing PSA valid from March 2013 up to December 2019. Under their PSA, SMEC shall supply power to CEDC for a contract capacity of 70,000 kilowatt-hours (kWh).
SMEC is paid by CEDC P4.6045 per kWh. The power requirements for CEDC are being sourced from the Sual power plant.
The Sual power plant, however, is scheduled to undergo maintenance shutdown from August 8 to September 6.
In order for CEDC to continue being supplied with stable and affordable power during the shutdown of the Sual power plant, they asked the Energy Regulatory Commission (ERC) to “approve the PSA, as amended,” and to “grant provisional authority to implement the PSA, as amended.”
The change in the PSA is mainly focus on replacement power during outages. Specifically, CEDC “shall procure replacement contract capacity and replacement associated energy from the Wholesale Electricity Spot Market (WESM).
“However, power supplier may offer replacement contract capacity and replacement associated energy from other sources and CEDC shall have the option to accept said offer, provided , it shall be lower than CEDC’s forecast replacement power cost from the WESM.
“If CEDC accepts the offer, the cost of such replacement power shall be a pass-through cost.”
“Without SMEC, CEDC would have no choice but to source all of its requirements from the WESM at constantly fluctuating prices, which are generally higher than prices fixed in contracts with power suppliers,” CEDC pointed out.
If CEDC is to source power from the WESM it would pay an average of P4.6678 per kWh, which is higher than what it pays SMEC.
“Considering the scheduled outage of the Sual power plant, the immediate issuance of provisional authority to implement the PSA, as amended, will shield CEDC from sourcing all the electricity requirements of its customers from the WESM,” their application read.