Meralco to bid out another 260-MW supply requirement

Power utlity Manila Electric Co. (Meralco) will open another round of bidding for a 260-megawatt interim power supply agreement (IPSA).

No offer was submitted during the first bidding, forcing Meralco to declare it a “failed bidding,” according to Meralco head of utility economics Lawrence Fernandez.

“Under the rules of the ERC (Energy Regulatory Commission), we are now conducting a second round of that bidding for the same 260 MW,” Fernandez said in a press briefing Friday, the deadline for submitting expressions of interest.

He said the 260-MW supply is needed for the summer season as electricity consumption is expected to spike due to El Niño.

If the bidding fails anew, Fernandez said they would have to resort to “using up” more of the other contracts, or if needed, would “get from the spot market.”

“So, what we’re doing right now is to get contracts so that we won’t have to rely on the spot market,” Fernandez said.

However, he assured that there will be “enough generation” in the Luzon grid, even with El Niño.

Meralco vice president and head of corporate communications Joe Zaldarriaga said there are two reasons why they are facilitating the IPSA: to ensure there is a enough supply during the peak months of consumption, and to avoid getting exposed to the spot market.

“If we will not cover our requirements through an interim power supply agreement, there could be a problem because we will be exposed to the market,” he said.

Should the second bidding fail again, Meralco may engage into a negotiated contract with a supplier, pursuant to ERC rules.

Meralco has already secured a 400MW IPSA from San Miguel Corp.’s Limay Power Inc. which offered a total electricity rate of P6.2708 per kilowatt-hour, including valueadded tax (VAT) and line rental, for the entire requirement.

Fernandez said they have already provided Limay the notice of award, and will be filing it for ERC’s approval before the contract gets implemented.