Lotilla asks energy companies to learn lessons from SMC-Meralco supply deals

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The Department of Energy said Monday the power industry should learn from the fixed-rate contract signed by Manila Electric Co. and San Miguel Corp. that led to challenges because of the volatile fuel prices. READ:

“This particular case is a learning experience for everyone, and as far as the DOE and the ERC jurisdictions are concerned, we want to make a clear distinction of the policy rule of DOE and the regulatory aspects for the ERC,” Energy Secretary Raphael Lotilla said during the Economic Journalists Association of the Philippines Infrastructure Forum in Pasay City.

“It’s a learning experience for everybody that if we provide for a fixed rate contract, then there must be other terms and conditions that will make the contract implementable, notwithstanding the highly volatile prices in the commodities market,” he said. Lotilla said the two major private power companies, “will be intelligently analyzing the TOR [terms of reference] of the contracts that they have entered into and that moving forward, we will both be benefiting from the lessons learned.”

“It only means they will stop supplying Meralco at the contract rates. Under current rules of the spot market, power plants that are able to operate need to offer their capacities to the market,” Fernandez said.

 

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