Power utility giant Manila Electric Company (Meralco) has secured three contracts for a total of 500-megawatt capacity that will satiate its requirements for renewable energy (RE) supply portfolio as prescribed under the government-enforced Renewable Portfolio Standards.

The tariffs cornered by the company in its competitive selection process (CSP) are relatively higher at P7.10 to P8.19 per kilowatt hour (kWh), if compared to the RE capacities auctioned by the Department of Energy (DOE) under the Green Energy Auction (GEA) program.

Meralco announced that the winning bidders in its RE capacity tendering process have been San Roque Hydropower, Inc. (SRHI) of the San Miguel group; then Gigasol3, Inc., and Santa Cruz Solar Energy, Inc. (SCSEI), which are both subsidiaries of ACEN Corp under the Ayala group.

It conveyed that the winning price cornered in the San Roque plant had been at P7.10 per kWh; and that covers the supply of 340MW capacity from the hydro facility.

Additionally, for solar-generated capacity to be supplied by Gigasol, the winning price was pegged at P8.1819 per kWh for 139 MW, while Santa Cruz solar plant will be supplying 21MW at a winning tariff of P8.1998 per kWh.

Meralco emphasized that the winning price offers were all lower than the P8.20 reserve price set for the RE capacity auction.

While there is government policy prescribing opt-in mechanism under the GEA, so mandated participants could draw RE supply from the capacities awarded by the DOE, it was noted that this is not being enforced yet, hence, Meralco cannot take that as a recourse for now.

According to Meralco Vice President Lawrence S. Fernandez, who is also the head of the bids and awards committee of the CSP for PSAs of the utility firm, they are prompted to undertake additional RE capacity contracting because their requirement had gone bigger based on the scale of captive customers that they will be catering to.

He added “as a highly regulated entity, Meralco has conducted its business in full compliance with the rules and regulations issued by the ERC (Energy Regulatory Commission) and DOE (Department of Energy).”

The power supply agreements (PSAs) from the auction process will be for a 10-year duration, Meralco stated, and it will become part of its mid-merit capacity needs or that chunk of supply that fills in the gap between baseload and peaking capacities.

“The 10-year PSA resulting from this CSP will cover Meralco’s 350-MW mid-merit requirement starting February 2025 and will increase by 150-MW beginning February 2026,” the utility firm reiterated.

Meralco qualified that it adhered to a transparent process in the CSP activity, hence, it engaged representatives from the DOE and consumer-groups as observers throughout the course of the auction.

“The proceedings were also streamed live, and all contracts resulting from this bidding process shall be subjected to regulatory proceedings and evaluation by the ERC,” it expounded.

At this stage, Meralco indicated that it already sealed contracts for 1,880MW of RE capacity – including the 850MW mid-merit capacity that it will be drawing from its affiliate Terra Solar project.