Meralco Tender Favors San Miguel, Aboitiz for Baseload Power

Manila Electric Co. (Meralco) has identified the three lowest bids for its 600-megawatt (MW) baseload capacity supply tender. SMC's Mariveles Power Gen Corp. (MGPI) and Sual Power Plant (SPI) offered 400MW at P5.36-5.44 per kilowatt-hour (kWh), while Aboitiz Power (AP)'s GMEC bid for 200MW at P5.58/kWh. These selections pave the way for 15-year power supply agreements (PSAs) set to commence in 2028 and 2029. The results highlight that large, depreciated coal fleets remain the most competitive source for firm baseload power in Luzon, with only SMC and AP meeting the required price levels among the six qualified bidders. The awarded contracts are expected to improve the utilization and revenue visibility for the winning generation companies (gencos). For Meralco, the agreements are earnings-neutral as generation costs will be passed through to consumers. Formalization of the PSAs is contingent upon final post-qualification and clearance from the Energy Regulatory Commission (ERC). This process will formally secure the contracted volumes ahead of the 2028-29 supply start. The outcome is viewed positively for both SMC and AP, with SMC expected to benefit more significantly due to the larger contracted capacity across its two plants compared to AP's 200MW from GMEC. However, the group earnings impact for both companies is anticipated to be limited given the relative size of these contracts within their overall portfolios. The tender results are seen primarily as a sentiment catalyst until ERC's final approval. Ensuring a stable and competitively priced baseload power supply is crucial for the Philippines' economic growth and the daily lives of its citizens, particularly in the rapidly developing Luzon region. This tender reflects Meralco's strategy to maintain supply security and manage power costs by leveraging existing large-scale generation assets.