Meralco seeks price challengers for Citicore power supply offer

By Danessa Rivera (The Philippine Star) | Updated July 31, 2017 - 12:00am

http://www.philstar.com/business/2017/07/31/1723048/meralco-seeks-price-challengers-citicore-power-supply-offer

MANILA, Philippines - Power distributor giant Manila Electric Co. (Meralco), in compliance with the competitive selection process (CSP) policy, is seeking price challengers for long-term power supply offered by Citicore Power Inc. from its solar power plants.

Citicore has offered to supply Meralco with 75 to 85 megawatts (MW) of capacity for a period of 20 years.

These will come from the 60-MW solar power plant in Toledo City, Cebu under First Toledo Solar Energy Corp. (FTSEC), the 18-MW solar farm in Mariveles under Next Generation Power Technology Corp. (NGPTC), and the 25-MW solar power plant in Silay City, Negros Occidental under Silay Solar Power Inc.

Citicore has offered a rate of P3.50 per kilowatt-hour (kWh) for the contracted capacities with a 1.5 percent annual escalation from the second to the 10th contracted years, and one percent  increase annually for the remaining contract period.

“Based on our assessment of current policy directions and industry competition, we think that it was the best option,” Citicore executive vice president for commercial and development operations Manolo Candelaria said.

Meralco has given price challengers until 4 p.m. of Aug. 14 to submit their financial proposals with bid security in the form of an irrevocable letter of credit amounting to P5 million.

One price challenger is PetroEnergy Resources Corp. (PERC) of the Yuchengco group.

 “We made a proposal to Meralco when it came out with an announcement, asking potential swiss challenge to Citicore, which offered P3.50 per kWh,” PERC vice president Francisco Delfin Jr. said.

In its offer, PERC will source the capacity from the 49-MW Tarlac-2 solar-power project. It is the expansion of the existing 50-MW solar power plant in the 55-hectare industrial land within the Central Technopark in Tarlac City.

Meralco has previously held a competitive bidding for offers made by Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar Inc. for 50 MW each.

Both solar developers have offered a price of P5.39 per kWh for a period of 20 years, lower than the latest solar FIT rate of P8.69 per kWh.

Solar Philippines will supply 25 MW from its solar farms in Tanauan, Batangas and Naic, Cavite, which are targeted for completion in February and April 2017, respectively.

Meanwhile, PowerSource is currently developing a 50-MW solar farm in the municipality of San Miguel, Bulacan which is scheduled for completion in August 2018.

Meralco received one price challenge for the offer made by PowerSource. 7 Balboa of Soleq, the solar power arm of Singapore-based Equis Funds Group Pte. Ltd., offered a price of P4.69 per kWh.

Meanwhile, no offer was made against that of Solar Philippines.

Both supply contracts have yet to be approved by the Energy Regulatory Commission.

Power co-ops seek tax exemption

By: Ronnel W. Domingo - 05:16 AM July 31, 2017

http://business.inquirer.net/234103/power-co-ops-seek-tax-exemption

State-managed electric cooperatives across the nation, all 121 of them, should be spared from a comprehensive tax reform program that the Duterte administration is pushing vigorously, according to the National Electrification Administration (NEA).

NEA Administrator Edgardo Masongsong said the agency was pursuing support from the Department of Justice on NEA’s position that tax privileges accorded to power cooperatives registered with the Cooperative Development Authority (CDA) be applied also to the 121 utilities.

According to the CDA, the Cooperative Code grants cooperatives tax exemption “to enable them to develop into viable and responsive economic enterprises and thereby fulfill their purpose of serving the need of the members.”

 “We are looking forward to have the favorable opinion of the DOJ that the electric cooperatives registered with NEA be tax-exempt as well,” Masongsong said.

He said the NEA was engaged in discussions along this line with energy committees in both the Senate and the House of Representatives as well as the departments of Energy and of Finance.

Citing Republic Act No. 10531, which amends the NEA Charter to strengthen the agency, Masongsong said all non-stock and non-profit rural energy distribution utilities were entitled to preferential rights granted to cooperatives under the Local Government Code of 1991 and other related laws.

He said that RA 10531 allowed NEA to prioritize the grant of incentives to electric cooperatives that were managed effectively and efficiently and which complied consistently with its mandates and directives.

Last June, Finance Undersecretary Karl Kendrick T. Chua said cooperatives were among interest groups that have been very vocal in seeking exemptions from tax reform.

“For those who want exemptions, I tell them that there is no free lunch,” Chua said. “If (one party is given) an exemption, somebody else would have to (take up that burden). It cannot be that everything is free from heaven.”

“In the DOF, we are not here to defend a sector or promote (a particular) interest,” he said. “We’re here to raise money for this entire country’s needs and to look after this country’s future.”

Even then, Chua said the DOF was open to discussing interest groups’ concerns and considering their proposals.

In terms of efforts toward full, nationwide electrification, the NEA’s latest goal is to achieve this by 2022.

NEA wants power coops exempted from tax reform¬¬

By Danessa Rivera (The Philippine Star) | Updated July 31, 2017 - 12:00am

http://www.philstar.com/business/2017/07/31/1723029/nea-wants-power-coops-exempted-tax-reform/

MANILA, Philippines - The National Electrification Administration (NEA) is seeking tax exemptions for the 121 electric cooperatives (EC) from the proposed Tax Reform for Acceleration and Inclusion Act. 

NEA administrator Edgardo Masongsong said they are currently working with rural electrification advocates from both the executive and legislative branches of government for this initiative.

He said other ECs registered under the Cooperative Development Authority (CDA) enjoy tax exemption privileges per the provisions of Republic Act (RA) 7160 or the Local Government Code of 1991. 

NEA is trying to get the Department of Justice’s (DOJ) support on its position that the same law could be applied to power coops under the NEA management too. 

“We are looking forward to have the favorable opinion of the DOJ that the electric cooperatives registered with NEA be tax-exempt as well,” Masongsong said.

Apart from getting the DOJ on board, the NEA chief said Sen. Sherwin Gatchalian, chairman of the Senate committee on energy and his counterpart in the lower house, Marinduque Rep. Lord Allan Jay Velasco, have been involved in these discussions along with the Departments of Energy and Finance.

According to Chapter 3, Section 13 of RA 10531, the law governing the NEA, all non-stock and non-profit rural energy distribution utilities are entitled to preferential rights granted to cooperatives under the Local Government Code of 1991 and other related laws. 

The law also states that “as a further incentive, the NEA may prioritize the grant of incentives in favor of electric cooperatives that are managed effectively and efficiently and comply consistently with its mandates and directives.”