Meralco seeks 650 MW of vital supply for next year’s summer

Distributor Manila Electric Co. (Meralco) is eyeing the procurement of 650 megawatts (MW) of crucial supply to ensure reliability of service for next year’s power-heavy summer months.

Meralco first vice president and head of regulatory management Jose Ronald Valles told reporters last week they were awaiting the Department of Energy’s (DOE) approval of the terms of reference (TOR) for the separate contracts for a 400-megawatt (MW) interim power supply agreement (IPSA) and a 250-MW peaking supply.

Distribution utilities usually undertake IPSAs to boost power supply during peak seasons and ensure that there would be no interruptions within their service areas.

Peaking power refers to supply that is used at any point in the day when demand is highest. In Meralco’s case, it aims to have the 250-MW peaking supply available from February to July next year.

According to Meralco head of utility economics Larry Fernandez, depending on the go signal from the DOE, they aim to get all bid submissions by Jan. 23, while power delivery is targeted for Feb. 26.

“The dates are not yet definite because we’re still waiting for the DOE approval. We’re hoping that the DOE will approve [the TORs] as soon as possible so we can make the targets definite,” Fernandez added.

Sans any approval from the DOE, Valles said they would have to source supply from the Wholesale Electricity Spot Market (WESM) where rates are usually higher. As WESM prices tend to fluctuate based on supplies fed by generators and the demand from the market, elevated rates would mean higher consumer bills.“We don’t want to speculate what the prices of WESM will be at that point, but the likelihood is that these would be high,” Valles said.

Earlier this month, the DOE projected the available capacity of the country’s hydroelectric power plants to drop to 725.5 MW from 3,472 MW due to the El Niño weather phenomenon.

The state weather bureau had announced that El Niño, which is characterized by long periods of dry spells, was expected to persist until the second quarter of 2024.

Despite the steep decline in available capacity, the DOE said it had no projected red alerts for next year, especially as new solar power plants were expected to begin operations.

These new solar-powered facilities were expected to generate up to 1,000 MW of power, the agency said.