The Energy Regulatory Commission (ERC) has yet to resolve the termination of power supply agreements (PSAs) totaling 1,800 megawatts (MW) between the Manila Electric Co. (Meralco) and firms owned by San Miguel Corp.
Ronald Valles, Meralco first vice president and head of regulatory management office, said because of this, the company cannot proceed with the conduct of a competitive selection process (CSP) for at least 1,200 MW of supply which will be needed by December.
“…If the termination is granted, we shall immediately conduct a CSP for the 1,800 MW capacity and we are hoping to conclude this process in the shortest time possible since the scheduled commercial operations date for at least 1,200 MW will start in December 2024 already. The conduct of this 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 1,800 MW worth of capacity was from the termination of the PSA from subsidiaries of San Miguel Global Power, specifically 1,200 from Excellent Energy Resources Inc. (EERI) originally due for 2024 and the remaining 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 last March.
In February 2021, Meralco received six qualified bid offers for the CSP of 1,800 MW of power wherein San Miguel Global Power subsidiaries offered the lowest levelized cost of electricity (LCOE).
EERI with LCOE of P4.1462 per kilowatt hour (kWh) for 1,200 MW from a natural gas-fired power plant and MPPCL for P4.2605 per kWh for 600 MW from a coal-fired power plant had offers that were below the reserve price of P5.2559 per kWh.
Monalisa Dimalanta, ERC chairperson, said the agency has asked Meralco sometime last March or April to provide additional information on the cancellation of the PSAs.
Dimalanta added the ERC will verify if Meralco complied with the requests when government offices return to work today. -Jed Macapagal
