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LKI 2020-024 Press Statement- Freeze Provisional Rate Authority of San Miguel Power Plants

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May 10, 2020


Vic Dimagiba , President of Laban Konsyumer Inc. issued a public statement today  that   three ( 3 ) separate  Motions for Reconsideration were  filed by the  power plants owned by   San Miguel , i.e. the San Miguel Energy Corporation and the South Premier Power Corporation , which  claimed  that  in the determination of the  provisional implementation authority,   the Energy Regulatory   Commission should have  included the   escalation clause of 3.5 %   and the Plant Capacity Factor should not be measured at 100%.

 On December 26, 2019, the Energy Regulatory Commission issued provisional authority in each of the 3  San Miguel Power Supply Agreements  (PSA ) with Meralco in the identical amount of Php 4.0459/kwh ( exclusive of VAT and line rentals ).  

The delivered rate of the 3 PSA are much higher than the provisional authority of  Php 4.0459/kwh. 

Further , any such new  provisional amount should likewise retroact to December 26 2019, the power plants owner said. 

The  3  San Miguel contracts, inclusive of VAT and line rentals ,  are as follows:

1. In ERC Case No. 2019-080 (South Premiere Power Corporation) for the supply of 290 MW mid merit power plant, the Delivered rate is Php 5.5348 /kWh and Php 5.7507 Levelized Cost of Energy.

2. In ERC Case No. 2019-081 (South Premiere Power Corporation) for the supply of 670 MW baseload power plant, the Delivered rate is Php 4.6314 and Php 4.9299 Levelized Cost of Energy. 


3. In ERC Case No. 2019-083, (San Miguel Energy Corporation) for the supply of 330 MW baseload power plant, the Delivered Rate is Pup 4.6314 and Php 4.9299 Levelized Cost of Energ

The San Miguel power plants obtained 3 separate Power Supply Contracts from  Meralco for a total of 1, 290 MW of power in compliance with the Competitive Selection Process . 

 Meralco had since collected the amount authorized  by the ERC.  In fact , Meralco customers already enjoyed  a 50 centavos rollback in February  in the implementation of  the 6 new PSA, including the San Miguel plants.

Laban Konsyumer Inc. submitted a Manifestation to the ERC and supported the issuance of the provsional authority to ensure continous supply of electricity at the least cost , and  presently , to maintain  or freeze the  status quo, i. e. Php 4.0459 /kwh ( exclusive of VAT and line rental )  each for the 3 San Miguel power plants .  

The power plant owners have filed a Counter Manifestation against the LKI  prayer for a  price freeze or status quo .

The power plants claim that their rates are lower from Meralco’s expiring PSA as well as lower than the historical spot market prices purchases by Meralco. They also question why ERC used an unrealistic 100% plant capacity utilization factor, and ignored the escalation clause, in the computation of the provisional authority.