Manila Electric Co. (Meralco) faces further delays in the bidding process for 1,250 megawatts (MW) of power generation capacity this year amid concerns raised by the Philippine Competition Commission (PCC).
The deferrals could compel Meralco to purchase electricity from the Wholesale Electricity Spot Market (WESM), where prices are more volatile, the power retailer said.
It could also hinder Meralco’s compliance with renewable energy portfolio standards (REPS), which mandate distribution utilities to source a portion of their supply from renewable energy.
Meralco earlier sought approval from the Department of Energy (DOE) for its proposed competitive selection processes (CSPs). These include a 200-MW renewable energy baseload supply starting Jan. 26, 2026; a 600-MW baseload supply starting Feb. 26, 2028; and a 450-MW of mid-merit capacity (300 MW and 150 MW) for delivery from Feb. 26, 2028, to Feb. 25, 2043, and Feb. 26, 2029, to Feb. 25, 2044.
Meralco voluntarily submitted the proposed CSPs to the PCC. The PCC earlier ruled that in approving Meralco PowerGen Corp.’s acquisition of a stake in the country’s gas plants, Meralco would have to comply with certain CSP conditions.
“We have already written Meralco the response, and I don’t know if that should be disclosed, but we sent them the stance of the Philippine Competition Commission,” newly appointed DOE Secretary Sharon Garin said.
“Depends on the response to the observations of PCC, but as of now they can’t [proceed with the CSP],” she said.
Garin said the PCC made certain observations that Meralco needed to address.
Meralco senior vice president and head of regulatory affairs Jose Ronald Valles said the company would send a letter to the DOE containing its responses to observations from both the DOE and PCC. “We will seek DOE’s guidance on the next steps,” Valles said.
Meralco head of utility economics Lawrence Fernandez warned that the delayed certification from the DOE would correspondingly delay the start of the affected CSPs.
“In turn, this may delay the signing and submission to Energy Regulatory Commission (ERC) of any power supply agreement arising from the CSPs,” Fernandez said.
“Such delays increase the possibility of Meralco having to resort to the WESM while waiting for regulatory approval of PSAs. Further, because one proposed CSP is for RPS compliance, then a delay may affect Meralco’s ability to comply with the RPS mandate,” he said.
“We can’t speculate where WESM prices will be in the future, but we can be certain of exposure to more volatile WESM charges if the PSAs are delayed,” said Fernandez.
