Meralco asks gencos to join CSP for power supply deal

A day before the deadline for the submission of bid offers for the supply of 170 megawatts (MW) to the Manila Electric Co. (Meralco), the utility firm urged power generation companies (gencos) to join the competitive selection process (CSP).

Through the Third Party Bids and Awards Committee (TPBAC), Meralco said Tuesday that interested parties have until January 5 to submit Expressions of Interest for the contract covering the period February 26 to July 25.

A pre-bid conference is scheduled on January 12 while the bid submission deadline is on February 2.

Meralco thanked the Department of Energy last month for the timely approval of the TOR for this round of CSP that allows the distributor to proceed with the emergency procurement for the supply it needs to meet the anticipated increase in demand in the coming months.

Meralco Head of Regulatory Management Office Jose Ronald V. Valles said this will “help Meralco ensure availability of reliable and cost-competitive supply, which is especially critical during the 2022 dry months and the upcoming National and Local Elections.”

The company is anticipating a peaking capacity deficit of 260MW, of which 90MW is secured through the Contract for the Supply of Electric Energy it inked earlier with the Power Sector Assets and Liabilities Management Corp., from September 2021 to July 25, 2022.

The reasons for the deficit include persistent Malampaya gas restrictions, the recently concluded maintenance shutdown of the Malampaya gas facility, and anticipated thinning electricity operating margins leading up to the May elections.

The need for Meralco to source additional peaking capacity through bilateral power supply contracts is also necessary to reduce the exposure of its customers to the Wholesale Electricity Spot Market.

In October, Meralco reported that its consolidated core net income in January to September 2021 grew by 15 percent to P18.1 billion from the previous year’s P15.7 billion driven by the combined effect of the 6-percent increase in energy distributed with the easing of quarantine restrictions, and increased contribution from its different business units and subsidiaries.

Reported net income improved by 47 percent year-on-year to P16.5 billion from P11.3 billion due to lower exceptional charges arising from the impairment recognized from the company’s investment in PacificLight Power Ltd. in 2020.

Consolidated total revenues in January to September 2021 were higher by 11 percent to P231.7 billion from the previous year’s P208.8 billion, mainly boosted by electricity revenues, which grew by 11 percent to P225.4 billion from P203 billion.

Meralco spent P18.5 billion on capital expenditures (capex) at end-September 2021. Of which, almost 60 percent went to networks capex. About 90 percent of the networks capex was spent on new connections, asset renewals and load growth projects while the balance was used to support other projects including the government’s “Build, Build, Build” program and the Meralco Electrification Program.

Image credits: (Bloomberg)