The Manila Electric Company (MERALCO) is requesting the Department of Energy (DOE) to approve its “emergency procurement” wherein it would acquire up to 260 megawatts (MW) to augment power supply during the summer.
Based on a Manila Bulletin report, MERALCO said that it wants the supply chain for the proposed interim power supply agreement (IPSA) with San Miguel Corporation (SMC) subsidiary Masinloc Power Partners Co. Ltd. (MPPCL) spared from the normal competitive selection process (CSP), as there’s an immediate need to add capacity within April to August because of the forecasted diminishing supply in the system.
The IPSA serves as the extension of the utility giant’s power supply agreement with MPPCL, which was secured in 2019 and lapsed this year.
MERALCO First VIce President and Head of Regulatory Management Atty. Jose Ronald Valles said the company has already sent a written request to DOE for confirmation of exemption from the CSP and has submitted the appropriate pleading before the Energy Regulatory Commission for the extension’s approval and implementation.
He added that the power giant is looking at a contract capacity of 220MW for the first six months and will climb to 260MW in the next six months. The price of the PSA will be P6.9161 per kilowatt-hour (kWh), which is significantly lower than their original PSA price of P11.0022 per kWh. He pointed out that the MPPCL will shoulder replacement power during outage allowance.
Valles likewise said that the procurement of additional power supply for the summer months aligns with MERALCO’s forecast of scheduled outages of power plants and the Malampaya gas pipeline, which could be made worse by forced power plant outages and gas supply restrictions that happened recently.
Power distribution companies like MERALCO would have to comply with the auction process of the CSP before they can purchase supply, which will then be dispatched to customers.