DOE approves Meralco’s CSP for 170-MW power

MANILA, Philippines — The Department of Energy (DOE) has cleared Manila Electric Co. (Meralco) to conduct a competitive bidding to augment power supply in its franchise area during the dry months and election period.

In a statement, Meralco said the DOE has approved the terms of reference (TOR) for its competitive selection process (CSP) for the supply of 170 megawatts (MW) of peaking power.

“We thank the DOE for the timely approval of the TOR that will allow us to proceed with the emergency procurement for the supply needed to meet the anticipated increase in demand in the coming months,” Meralco head of regulatory management office Jose Ronald Valles said.

“This will help Meralco ensure availability of reliable and cost-competitive supply, which is especially critical during the 2022 dry months and the upcoming national elections,” he said.

With the DOE approval, Meralco’s Third Party Bids and Awards Committee (TPBAC) published an invitation to bid yesterday for interested generation companies to participate in the CSP for the contract covering the period Feb. 26 to July 25, 2022.

The TPBAC has set the deadline to submit expressions of interest on Jan. 5, 2022.

Meanwhile, it has set a pre-bid conference on Jan. 12, 2022, and the bid submission deadline on Feb. 2.

Under the CSP, power generators can make a bid for a minimum 50-MW or make an offer a single or a portfolio of plants to meet the 170-MW peaking supply needed.

Moreover, Meralco set no outage allowance and required 100 percent guaranteed availability of  the contract capacity for 12 hours daily covering peak hours of Meralco, which runs from 9am to 9pm.

Earlier this year, Meralco sought for approval for its emergency procurement of up to 260-MW aimed to address supply dips until summer next year.

The interim power supply agreement (IPSA) extension proposal originated from the power utility’s power supply deal with Masinloc Power Partners Co., Ltd. (MPPCL) in 2019 covering the supply of 220 MW, which lapsed this year.

Under the IPSA extension, Meralco also proposed to increase the supply from MPPCL from 220 MW to up to 260 MW. It is priced at P6.9161 per kilowatt-hour (kwh), significantly lower than peak WESM price of P16 per kwh.

However, the DOE thumbed down its request to extend the IPSA because it did not go through CSP.

The CSP is mandated by government to get the least cost power to consumers.