Meralco eyes rebidding of supply deal scrapped by San Miguel Global Power

MANILA, Philippines — Manila Electric Co. (Meralco) said it may ask the help of the Department of Energy (DOE) to conduct a competitive selection process for the contract capacity of 1,800 megawatts.

This comes after San Miguel Global Power subsidiaries Excellent Energy Resources Inc. (EERI) and Masinloc Power Partners Co. Ltd. (MPPCL) terminated two power supply agreements (PSAs) with Meralco covering the period 2024 to 2025.

In a disclosure yesterday, Meralco said it received the notices of termination from San Miguel Global Power.

In terminating the PSAs, San Miguel Global Power cited the provisions in the PSAs that allow for termination if conditions under the agreements are not met.

The ERC has not approved the PSAs which were filed in March last year, San Miguel Global Power said in the notices of termination.

“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.

However, Meralco said the termination has no impact on its business and financial conditions yet, as the electricity is not yet being supplied under the said PSAs.

“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 with commercial operations date 2024 to 2025,” Meralco said yesterday.

For its part, the Energy Regulatory Commission (ERC) said the agency is set to review the decision of SMC Global Power.

The terminal PSA with EERI covered 1,200 MW while that for MPPCL covered 600 MW, respectively.

Under the PSAs, these two companies were supposed to start supplying to Meralco by 2024 and 2025.

Meralco said it is finalizing a one-year emergency power supply agreement for 670 megawatts to replace its 2019 power supply agreements that were subjected to a writ of preliminary injunction by the Court of Appeals.

This is according to Meralco head of regulatory management office Jose Ronald Valles who said the power company is looking at an emergency deal with Aboitiz Power Corp. and San Miguel Corp.

At the sidelines of the Philippine Electric Power Industry Forum organized by the Independent Electricity Market Operator of the Philippines, Valles said the deal would only be good for one year.

The contracts will replace the 670 MW under Meralco’s 2019 power supply agreement with SMC Global Power’s South Premiere Power, for which the CA issued a temporary restraining order.