4 gencos keen on bidding for 70MW MERALCO supply contract

meralco logo electric post

Four power generation companies (gencos) have expressed interest to bid for the Manila Electric Company’s (MERALCO) 70-megawatt (MW) 15-year supply contract from January 2022 to January 2037.

The gencos, according to a BusinessMirror report, are Panay Energy Development Corporation (PEDC), Quezon Power Philippines Ltd. (QPL), Sem-Calaca Power Corporation, and Therma Luzon, Inc. (TLI).

PEDC is a unit of Global Business Power Corporation, which in turn is a subsidiary of MERALCO PowerGen Corporation — MERALCO’s power generation arm. It operates two coal power plants in Iloilo City with a total capacity of 314MW.

QPL operates the 460MW coal facility in Mauban, Quezon. Sem-Calaca, owned by Consunji-led Semirara Mining and Power Corporation, operates the 600MW Calaca coal plant in Batangas. Aboitiz Power Corporation-owned TLI, meanwhile, is the independent power producer administrator of the 1,184MW Pagbilao coal plant, also in Quezon.

MERALCO Vice President and Head of Utility Economics Lawrence Fernandez said the interested bidders have been registered with the Wholesale Electricity Spot Market since 2017.

The power giant is bidding out the 70MW baseload capacity, which was affected by the Supreme Court’s previous ruling mandating power distributors to undergo a competitive selection process (CSP) in procuring their respective supply requirements.

Based on the competitive selection process’ (CSP) bid invite, an annual ancillary service cost recovery cap, with a floor value of Php0.28 per kilowatt hour, will be considered in the computation for the levelized cost of electricity (LCOE).

Both the bidder’s proposed price and its LCOE are subject to a pre-determined reserve price that will only be revealed by the third-party bids and awards committee to eligible bidders when the bids themselves are opened.

MERALCO FVP and Regulatory Management Office head Jose Ronald Valles said the company will be conducting more CSPs for the procurement of 170MW in power supply requirements given the Malampaya gas field’s depleting supply and to secure adequate supply in the run up to the May 2022 elections.

The power giant last held a CSP on February 19, in which SMC Global Power Holdings bagged two 20-year PSAs for 1,800MW in supply, which will take effect in 2024.