Meralco seeking 1500-MW power contract

We need… additional baseload (capacity) and hopefully new plant capacity.

Meralco said it needs additional baseload capacity and new plant capacity. Analy Labor

The Manila Electric Co. (Meralco) is set to buy at auction this year another 1,500 megawatts (MW) of power supply in a bid to bring in more energy capacity and provide higher savings for consumers.

Newly-installed Meralco president Ray Espinosa told reporters on the sidelines of a signing event in Pasig City on Friday the supply contract will be the second batch under the competitive selection process (CSP) for the rest of the year following the prospective bidding of some 2,900 MW power this month.

“I think, after the first batch, we are looking at (bidding out) another 1,500 MW,” Espinosa said, quickly adding that Meralco is reviewing whether a one-time auction, or alternately, a phased bid is appropriate.

“We need… additional baseload (capacity) and hopefully new plant capacity. We have to understand that we also have to ensure that new plants are built to replace the old, aging plants,” he said.

The plan was in preparation for the expiration of Malampaya gas contracts in 2024.

Last week, Meralco successfully bid out 1,200 MW of brownfield capacity to three firms — Ayala-led Phinma Energy Corp., Ramon Ang-led San Miguel Energy Corp., and South Premiere Power Corp. — with the supply slated to begin in December 2019.

Phinma has committed to supply 200 MW and SMEC signed a 330-MW contract while South Premiere will provide 670 MW of power to Meralco. The contracts will end in December 2029 and will provide as much as P9.4 billion savings for consumers every year. The CSP remains subject to approval of the Energy Regulatory Commission.

Meanwhile, Meralco will commence today, Monday, the auction of some 500 MW mid-merit capacity. It is also set to review the terms of reference (TOR) for the bidding of the remaining 1,200 MW of greenfield capacity after only one bidder and a wholly-owned subsidiary of Meralco — the Meralco PowerGen Corp. — emerged as the lone bidder for the said CSP.

Espinosa said the TOR review was in response to calls from private companies to allow them to join the selection process given that some terms prevent them from joining the bidding.

Tycoon Ramon Ang and Phinma Energy President John Eric Francia on Friday both called on Meralco to allow them to join the bidding of the pending CSP by tweaking the TOR.

“We will study changing (the TOR). We want all firms to join. There are just considerations that’s why we are very stringent with the TOR for the greenfield. We will see,” Espinosa said.

“They have various reasons for not joining. Actually, we cannot adjust everything to consider all of their views so we have to study all of their commitments and see what is the best way to move forward in order to ensure that it will be a successful bidding,” he added.