The Manila Electric Company (MERALCO) announced its failure to secure bids for the firm’s 260 megawatts (MW) interim power supply agreement (IPSA).
In a report by the Philippine Star, MERALCO’s Head of Utility Economics, Lawrence Fernandez, stated that the distribution utility (DU) had not received any interest from bidders by the time the deadline for expression of interest had passed.
The company initially declared a bidding failure on February 26 when it received no offers despite expressions of interest from San Roque Hydropower Inc. and 1590 Energy Corporation.
MERALCO will now iron out negotiations for a power supply agreement with their suppliers in compliance with the rules made by the Department of Energy (DOE) and the Energy Regulatory Commission (ERC).
Fernandez explained that the firm aimed to steer clear of the spot market as prices tend to be volatile, and if the DU managed to snag a supplier for the 260 MW, the offer would be shielded from the price volatility of the market.
However, he explained that the power supply agreement would still be subjected to ERC’s review. If MERALCO falls short in securing an agreement, the firm would consider maximizing its existing contracts.
Earlier, the DU managed to secure an IPSA with a capacity of 400 MW from Limay Power Inc., a wholly-owned subsidiary of San Miguel Corporation (SMC). Limay Power had proposed a total electricity rate of Php 6.2708 per kilowatt hour (kWh), containing line rental and value-added tax for the requirement.
Limay Power has been working on submitting the PSA to the ERC.