Meralco cannot delay 1,800 MW supply – DOE

Published August 9, 2020, 10:00 PM

by Myrna M. Velasco

Power utility giant Manila Electric Company (Meralco) cannot delay the additional 1,800 megawatt of greenfield capacity and has been directed to explore other options in meeting its targeted competitive selection process (CSP).

“Their (Meralco’s) request is to delay it…that they will start CSP by October. So what we’re trying to say is: explore additional or other mediums to proceed so we can still be able to hit the target of delivery of supply,” said Energy Assistant Secretary Redentor Delola.

According to Delola, the competitive bidding for the power supply agreements (PSAs) of the 1,800MW capacity was already accorded go-signal by the DOE. It is just the timeline of the auction that they are mandating Meralco to fast-track.

But Meralco raised the physical constraints it has been encountering because of the coronavirus pandemic. DOE, however, said MERALCO must be able to execute alternatives so the PSA bidding can advance.

The utility firm told reporters that the targeted additional capacities must be commercially online by year 2024, or the timeframe when supply in Luzon grid would need shoring up because it may already be outpaced by demand growth.

Pre-Covid forecasts manifest supply tightening around 2022 to 2023, but because of demand slump precipitated by a shrinking economy, it is seen that such timeline may be pushed back a bit until 2024 to 2025.

Energy Undersecretary Emmanuel Juaneza said the DOE will be replying to Meralco’s letter-request soon – and that the plea for its CSP had already been approved at his level and even the department’s legal staff. The final approval will come from the office of Secretary Alfonso Cusi.

Meralco indicated its projection for capacity addition has not changed and that they will still need to go ahead with planned supply procurements for the future requirements of its customers.

Meralco Chairman Manuel V. Pangilinan noted that while the niggling health crisis poses continued uncertainty in their operations, the company is ready to invest and ensure supply availability to the roughly 6.9 million customers it has been serving.

“Meralco recognizes its critical role in enabling industries, and now more so, as businesses re-start and transition to the new normal,” he stressed.

He added that “even while everyone faces uncertainty of an unknown future, the entire Meralco organization is committed to and will remain relentless in ensuring network reliability, customer care and work place integrity.”

On the company’s forward investments, Pangilinan asserted that “we are moving with caution but remain positive that a recovery is in the offing.”