Power utility giant Manila Electric Company (Meralco) has beefed up its supply portfolio with additional 400-megawatt baseload power supply procurement from the Limay thermal power plant of SMC Global Power Holdings of the San Miguel group.

The tariff for the new interim power supply agreement (IPSA) underwritten by Meralco through its recently concluded competitive selection process (CSP) had been pegged at P6.2708 per kilowatt hour (kWh), a headline rate that already factored in value added tax (VAT) and line rental.

The company emphasized that this power supply deal is considerably an ‘interim contract’ of just one year, and this will primarily help the company wade through forecasted surge in demand during this year’s El Nino-saddled summer months.

In that batch of supply sourcing, Meralco indicated that it cornered at least two qualified tenders – and the second best offer is from the Masinloc Power Co. Ltd. facility, another power generation company of the San Miguel group, with a price offer of P6.2957 per kWh and committed capacity delivery of 195MW.

By rule, CSP or competitive bidding processes for the PSA-underpinned supply procurements of distribution utilities (DUs) like Meralco, could accept either a block offer for the entire requirement being auctioned or generation companies can offer strips and the DU can just do stacking of the best bids until its full capacity needs is filled up.

“Of the three (3) bidders that expressed interest to participate in the CSP, only two (2) submitted their qualification documents, technical proposal, and bid price…both offers are compliant with the P6.3512 per kWh reserve price set for the bidding,” the utility firm stressed.

Meralco added that “the submissions passed the criteria contained in bidding documents and pre-qualification evaluation,” as framed by the company’s Bids and Awards Committee for Power Supply Agreements (BAC-PSA).

The new IPSA will be subject to approval of the Energy Regulatory Commission (ERC) before the pass-on of the contracted rates can be reflected in the bills of consumers.

“The resulting IPSA, which will be subject to regulatory proceedings, will be implemented once approved by the ERC and will be effective until February 2025,” the power firm specified.

On this year’s dry months, it is anticipated that Meralco customers would be cranking air-conditioner thermostats more often, hence, the utility firm has been preparing for any unprecedented hike in consumption.