The bid could come as early as the latter part of this week. Swalec has thus far rebuffed Welsh Water's advances and questioned the benefits of a combined power and water utility.
The probability of yet another bid for a regional electricity company (REC) comes amid growing takeover fever in the stock market, with speculators piling into perceived target companies.
More than 20 million shares in Asda changed hands on Friday amid frantic speculation that the supermarket group would be on the receiving end of a bid shortly.
Argyll, Associated British Foods and William Morrison were all mooted as possible predators. Asda shares rocketed by 5.25p to 103.5p.
Welsh Water has delayed talking in detail with Swalec because it wanted to see what value unofficial or "grey" dealings would put on its National Grid stake. It also wants the uncertainty of Tuesday's Budget out of the way.
Welsh Water is unfazed by the Government's decision last week to refer National Power's pounds 2.8bn offer for Southern Electric and PowerGen's pounds 1.95bn tilt at Midlands Electricity to the Monopolies and Mergers Commission.