The Department of Energy (DOE) asked power retailer Manila Electric Co. (Meralco) to revise its power supply procurement plan to include competitive selection process (CSP) or bidding for terminated power supply agreement (PSA) contracts.
DOE Undersecretary Rowena Guevara said the agency received Meralco’s proposed terms of reference (TOR) for 1,800 megawatts (MW) of terminated PSA with San Miguel Corp. covering the 2024 to 2025 supply period.
“Yes, the DOE received the proposed TOR. However, the responsibility to review the TOR rests with the ERC [Energy Regulatory Commission],” Guevara said.
She said the DOE advised Meralco to post the revised power supply procurement plan containing the planned CSPs.
“Once posted, DOE will review the power supply procurement plan of Meralco if it already reflects the termination of the San Miguel contracts, as confirmed by the ERC,” Guevara said.
Meralco is pursuing a new CSP after the ERC approved the termination of its 1,800-MW PSA with SMC’s power subsidiaries.
San Miguel Global Power Holdings Corp. (SMGP) subsidiaries Excellent Energy and Masinloc Power Partners Co. Ltd. issued notices of termination of their 20-year PSAs with Meralco for 1,200 MW and 600 MW, respectively, in March.
SMGP decided to terminate the PSAs with Meralco due to ERC’s non-issuance of the final approvals within the respective long stop dates in September 2021.
“We already granted their request for withdrawal of the application. It has been approved but since they have not completed, they haven’t done the CSP, they have to observe the new CSP guidelines. Because the binding rules would be the set of rules at the time you filed. Because there is a new one, they have to comply,” ERC chairperson Monalisa Dimalanta said.
Meralco first vice president and regulatory management head Jose Ronald Valles confirmed that the company received the ERC orders granting the termination of the 1800MW PSAs.
“We highlight the urgency of conducting this CSP ASAP considering that we need to implement the resulting PSAs by December 2024 for 1200MW and May 2025 for 600MW after ERC approval, based on the original scheduled COD [commercial operations date],” he said.