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Manila Bulletin devider Business devider Meralco seeks PSA bids for brownfield 1,200MW baseload supply

Meralco seeks PSA bids for brownfield 1,200MW baseload supply

Published Nov 30, 2023 03:45 am

At A Glance

  • According to Meralco, the propounded capacity purchase will "replace the baseload supply from the terminated PSAs of Ilijan and Sual" – that is in reference to the power supply contracts that had been previously terminated by the San Miguel group as sanctioned by Court orders.

Power utility giant Manila Electric Company (Meralco) will be seeking offers from power generation companies (GenCos) on its scheduled auction of 1,200-megawatt baseload power supply that will replace brownfield capacities currently drawn mainly from emergency power supply procurements.

In a tender notice, the company indicated that the power supply agreements (PSAs) to be awarded will have 15-year term – and the effectivity will start from the approval of the Energy Regulatory Commission.

According to Meralco Vice President Lawrence S. Fernandez, who is also the chair of the bids and awards committee (BAC) of the company’s competitive selection process (CSP) for PSAs, this round of supply contracting will be for the brownfield baseload requirements of the utility firm.

He explained that the capacity purchase will “replace the baseload supply from the terminated PSAs of Ilijan and Sual” – that is in reference to the power supply contracts that had been previously terminated by the San Miguel group as sanctioned by Court orders.

The emergency PSAs just have one-year duration and they will lapse by next year, hence, these capacities in the supply portfolio of Meralco will have to be replaced with longer term contracts.

Fernandez emphasized that the capacities to be replaced by the PSA on tender, are those that are currently covered by emergency power supply deals with San Miguel’s Ilijan facility and the Aboitiz group’s Therma Luzon plant.

In the bid invitation issued by Meralco, it has been calling on all interested GenCos “to participate in the CSP,” and it slated the deadline of submission of expression of interest (EOI) by December 11 this year.

The pre-bid conference, which will serve as a venue for the prospective bidders to raise concerns and questions on the PSA terms of reference (TOR) will be on December 18; while the bid submission date will be January 23 next year.

Meralco underscored that “pursuant to the DOE’s (Department of Energy's) advisory on the conduct of CSP for power supply using indigenous natural gas as transition fuel, power suppliers with natural-gas fired power plants are highly encouraged to participate in the bidding".

The power supply deals will have fuel pass-through provision, hence, it is anticipated that prices will fluctuate monthly based on the swing of fuel costs in the market.

The prescribed delivery date for the initial 810MW of the contracted supply will be on December 26, 2023; while additional 200 MW (net) capacity will be on February 26, 2024; and the balance of 190MW (net) shall be provided by March 26 next year.

Nevertheless, Meralco qualified that the delivery date will have some adjustments because the TOR prescribes that the contract will be effective upon regulatory approval.

Related Tags

Department of Energy Energy Regulatory Commission power supply agreements competitive selection process Manila Electric Co. (Meralco)
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