The Manila Electric Co. (MERALCO) may soon seek help from the Department of Energy (DOE) in conducting a competitive selection process (CSP) for its contract capacity of 1,800 megawatts (MW).
In a disclosure to the Philippine Stock Exchange (PSE), MERALCO said that it has received notices of termination from San Miguel Global Power subsidiaries Excellent Energy Resources Inc. (EERI) and Masinloc Power Partners Co. Ltd (MPPC) on their power supply agreements covering the period 2024 to 2025.
In the termination of the PSA, SMC Global Power cited provisions in the agreement allowing for the termination if conditions are not met.
SMC Global Power said that the Energy Regulatory Commission (ERC) has not approved the said PSAs filed in March 2022.
“Pursuant to the said PSA provision, the termination shall be effective upon the lapse of 15 days from Meralco’s receipt of the notice or on April 1, 2023,” MERALCO said in its disclosure.
The termination, however, has no impact on MERALCO’s business and financial conditions as the electricity is not yet being supplied under the agreements.
“Nevertheless, MERALCO is evaluating the best available options for the benefit of its customers, without excluding the possibility of immediately requesting the Department of Energy to approve the reconduct of a competitive selection process for the contract capacity of 1,800 MW (net), with commercial operations date 2024-2025,” MERALCO said.
In a report by the Philippine Star, ERC said that it will review the decision of SMC Global Power.
The PSA with EERI covers 1,200 MW while MPPC covers 600 MW. The two contracts were supposed to supply MERALCO by 2024.
In related developments, MERALCO said that it is finalizing a one-year emergency power supply agreement of 670 MW to partially replace its 2019 PSAs subject to a writ of preliminary injunction by the Court of Appeals.
MERALCO head of regulatory management office Jose Ronald Valles said that the company is looking at an emergency deal with Aboitiz Power Corporation and San Miguel Corporation.
Valles said that the deal would be good for one year.