Meralco seeks new suppliers for 1,200 MW of electricity

Amid allegations that it was “favoring” certain generation companies in its competitive bidding process, distributor Manila Electric Co. (Meralco) on Thursday announced it was seeking new suppliers for 1,200 megawatts (MW) of crucial supply, encouraging firms with existing natural gas-fired power plants to participate.

In a statement, Meralco said the Department of Energy (DOE) had already approved the terms of reference (TOR) for the 15-year supply agreements.

Similar to the 1,800-MW capacity it is currently bidding out, Meralco did not limit the full 1,200-MW capacity to only one supplier, and specified that it may be divided among multiple companies.

“Power suppliers with natural gas-fired power plants are highly encouraged to participate in the bidding,” Meralco said, citing the DOE’s recent advisory proposing that distribution utilities source a percentage of their supply requirements from liquefied natural gas facilities.

Under the TOR, the prescribed delivery date for the initial 810 MW will be on Dec. 26, while the additional 200 MW and 190 MW must be delivered by Feb. 26 and March 26 next year, respectively.

Companies may submit their expression of interest until Dec. 11. The prebid conference is scheduled on Dec. 18, while the bid submission is due on Jan. 23 next year.

Conglomerate San Miguel Corp.’s power units South Premier Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) in 2019 won contracts to provide a portion of the full capacity.

Both companies applied for contract terminations last year after the Energy Regulatory Commission (ERC) denied their joint motions for price adjustment that would have allowed them to recover around P5 billion in losses incurred in the first five months of 2022 due to soaring fuel prices.

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The Court of Appeals in June this year ordered both SMEC and SPPC to cease supplying 330 MW and 670 MW, respectively, to Meralco.

This is the second competitive selection process that Meralco has announced in a span of a month. In early November, Meralco announced that it was seeking suppliers for 1,800 MW of capacity that must be available by next year.

Excellent Energy Resources Inc. and Masinloc Power Partners Co. Ltd., both San Miguel subsidiaries, filed for contract terminations for the 1,800-MW capacity, citing approval delays on the part of the ERC. INQ