BIDDING FOR MERALCO SUPPLY DEAL FAILS ANEW

MANILA Electric Co. (Meralco) again failed to attract bidders last Friday for a 260-megawatt (MW) interim power supply agreement aimed at meeting demand for the summer season.

With the auction having been declared a failure twice, the firm said it could resort to a negotiated sale.

Meralco last February 27 declared a failed bidding for the 260-MW after two firms withdrew their expressions of interest.

It immediately announced a second attempt and set a March 8 deadline for offers.

Last Friday, the firm’s bids and awards committee “did not receive any expression of interest and no prospective bidder purchased the bidding documents … [and] the bidding is considered to have failed,” Meralco said.

A February 28 auction for 400 MW of supply was successful, however, and the power firm said it had officially awarded a contract to Limay Power Inc., a subsidiary of San Miguel Global Power Holdings Corp.

“For this summer, we were preparing for the increase in demand, and we lined up two biddings,” Meralco Vice President Lawrence Fernandez said last week.

“The one for 400 MW … was already given to the winning bidders, so all that is needed is the filing to the Energy Regulatory Commission for approval in order for us to implement it sooner,” he added.

The firm needs to secure the 260 MW, Fernandez said, as the two supply deals “will definitely be needed for the summer season .... at least until July, because that is the time when electricity consumed is high in the Meralco area.”

The firm will now directly look for interested parties and, if pushed further, could resort to tapping the Wholesale Electricity Spot Market, which could drive power bills up.

“What we’re doing right now is to get contracts so that we won’t have to rely on the spot market … Under the rules of the ERC, after two failed bids, if no one still participates, then we may engage or enter into a negotiated procurement,” Fernandez said.

He noted that “from the projections that the DoE (Department of Energy) has given us, there will be no shortage of supply and that there will be enough generation in the Luzon grid, even with El Niño.”