Power utility giant Manila Electric Company (Meralco) will seek the approval of the Department of Energy (DOE) for the terms of reference (TOR) for the bidding of its planned additional 480-megawatt supply procurement.
Meralco will conduct competitive selection process (CSP) for the new power supply procurement that will boost baseload capacity during the summer months.
"We are preparing for the summer months next year," said Meralco First Vice President and Head of Regulatory Affairs Jose Ronald V. Valles. So far, Meralco has already identified 180MW of baseload and 300MW of peaking requirements for DEO approval of the TOR.
The energy department earlier raised alarm of highly probable "red alert scenarios" during the high demand-months of summer, especially if distribution utilities (DUs) failed to properly manage their supply. The DOE also consider possible remedial measures like their participants in the interruptible load program (ILPs) – then their customers could suffer unwanted service interruptions or blackouts.
The CSP is a bidding process administered by a third party bids and awards committee (TPBAC) sanctioned by a DU in its procurement of supply by entering into power supply agreements (PSAs) for a specified duration.
At this stage, Meralco similarly divulged that it requested the DOE to defer evaluation of the emergency power supply agreements (EPSAs) it earlier submitted supposedly as replacement of the power capacity from SMC Global Power Holdings Corp of the San Miguel, which pushed for the termination of its power supply contracts covering capacities drawn from the Sual and Ilijan plants.
“We have asked the DOE to put on hold the evaluation of the request (for EPSAs) because San Miguel has written us a letter signifying its intent to continue supplying power to Meralco ‘under protest’ without prejudice to the available remedies that they may undertake,” Valles noted.
SMC Global Power previously indicated its plan to terminate its PSAs with Meralco even prior to the issuance of the decision of the Energy Regulatory Commission (ERC) denying its petition for a P0.30 per kilowatt hour (kWh) rate hike.
“Because they (San Miguel energy companies) are now supplying power to Meralco continuously until this time, there’s no need for the EPSAs at the moment, but it is still pending at the DOE and it has not been withdrawn,” the Meralco executive explained.
The PSA for the contracted capacity from the Ilijan gas plant was signed with San Miguel subsidiary South Premiere Power Corporation (SPPC); while the capacity being procured from the Sual plant had been cemented with San Miguel Energy Corporation (SMEC).
Nevertheless, Valles emphasized that “if San Miguel will pursue termination of the two contracts, then we have to await a notice of termination from them.”
He further qualified that once they receive the "notice of termination" from San Miguel, "We will immediately manifest to the ERC our opposition to the termination and request guidance from the ERC to resolve the matter.”