July 4, 2019 | 12:04 am By Janina C. Lim, Reporter
THE Philippine
Competition Commission (PCC) has approved the proposed joint venture between
the Bases Conversion and Development Authority (BCDA) and the consortium of
Manila Electric Co. (Meralco) and Japanese firms Marubeni Corp., Kansai
Electric Power Co., Inc. and Chubu Electric Power Co., which will undertake the
development of a power distribution system in New Clark City (NCC).
The joint venture will
distribute power to the host of locators and facilities in the NCC in Capas,
Tarlac for 25 years.
In a Commission
decision dated June 25, the anti-trust agency said “the proposed transaction
has been found to not likely result in a substantial lessening of competition
in the retail electricity supply market within New Clark City and the
distribution utility market of generated electricity through a supply agreement
in the Luzon and Visayas grids.”
The PCC noted that as
more businesses are expected to enter NCC, a development which government is
positioning to be Luzon’s next economic growth driver, there will be more
potential “contestable customers” who can choose their own power provider and
not necessarily be limited to the joint venture firm.
Contestable customers
are consumers with an average monthly consumption of at least 750-kilowatts
(kW) and are deemed by the Department of Energy (DoE) as qualified establishments
to participate in its Electricity Open Access Scheme and choose their own
retail power suppliers from anywhere in the country.
“Given the development
of New Clark City, the PCC expects an influx of potential locators,
particularly agro-industrial and institutional clients, to qualify as
contestable customers,” the agency added.
The PCC also noted that
the DoE’s recent implementation of the competitive selection process (CSP)
ensures competition among distribution utilities and electric cooperatives in
securing supply from power generators.
“The antitrust
authority views the CSP in securing power supply agreements as important
competitive step that would constrain the joint venture’s ability to foreclose
other power generation companies,” the agency added.
“Lastly, the PCC sees
the competitive constraints posed by other generation companies to limit the
joint venture company’s ability to foreclose other distribution utilities and
electric cooperatives.”
The Meralco-led
consortium will have a 90% stake in the joint venture company, while BCDA holds
the remaining 10%.
BCDA is a
government-owned and controlled corporation that engages in public-private
partnerships to develop public infrastructure such as tollways, airports,
seaports, and major real estate developments.
The Meralco-Marubeni
consortium comprises of Meralco, Japanese conglomerate Marubeni, and power
distributors Kansai Electric Power and Chubu Electric Power.
Marubeni Corp. and its
consolidated subsidiaries are engaged in the handling of products and provision
of services in the areas of import and export. It also conducts business
investment, development and management.
The PCC has so far
approved three joint ventures involving the BCDA in relation to the development
of the 9,450-hectare NCC.
The others are namely
the investment promotion agency’s joint venture with Malaysian firm MTD Capital
Berhad for the National Government Administrative Center and with the
consortium of PrimeWater Infrastructure Corp., Tahal Consulting Engineers,
Ltd., Prime Asset Ventures, Inc., and MGS Construction, Inc., for the water and
wastewater management of the city.
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