Power distributor Manila Electric Co. (Meralco) is seeking official confirmation from the Energy Regulatory Commission (ERC) on the termination of the supply agreement between Meralco on one hand and units owned by San Miguel Corp. (SMC) on the other so it can proceed to put out a rebid of those contracts.
Meralco on Tuesday said the ERC still has to resolve the termination of power supply agreements (PSA) involving 1,800 megawatts (MW) worth of capacity between Meralco and firms owned by San Miguel Corp.
Ronald Valles, Meralco first vice president and head of regulatory management office, said the ERC resolution is a requirement for the power distributor to push ahead with the rebid under the competitive selection process (CSP) of at least 1,200 MW its needs by December next year.
“If the termination is granted, we shall immediately conduct a CSP for the 1,800 MW capacity and we are hope to conclude this process in the shortest time possible since the scheduled commercial operations date of at least 1,200 MW will start in December 2024. The conduct of the CSP will depend on the timing of the ERC resolution which we hope to receive soon. This is our priority at the moment, considering the urgency,” Valles said.
Meralco said the sought after 1,800 MW arose the termination of the power supply contracts of San Miguel Global Power subsidiaries, specifically the 1,200 from Excellent Energy Resources Inc. (EERI) originally due for 2024 and the 600 MW from Masinloc Power Partners Co. Ltd. (MPPCL) originally due for 2025.
San Miguel Global Power issued notices for the termination of the PSAs in March this year.
In February 2021, Meralco received qualified bid offers for the CSP of 1,800 MW of capacity when the San Miguel Global Power subsidiaries offered the lowest levelized cost of electricity.
EERI submitted a bid of P4.1462 per kilowatt hour (kWh) for 1,200 MW from its natural gas-fired power plant while MPPCL offered P4.2605 per kWh for 600 MW from its coal-fired power plant, which were below the reserve price of P5.2559 per kWh.
Monalisa Dimalanta, ERC chairperson, said the agency has asked Meralco in March or April to provide additional information on the cancellation of the PSAs.
Dimalanta said the ERC will verify if Meralco complied with the requests as government workers return to work today.
