By
Lenie Lectura- July 15, 2019
THE Manila Electric Co.
(Meralco) has started conducting a competitive selection process of its power
requirements following a Supreme Court decision that required all power-supply
agreements (PSAs) forged after June 30, 2015, to undergo a CSP.
In a published bid
invite last Friday, the utility firm put for bidding 1,200 megawatts (MW) of
capacity that Meralco needs in order to supply its customers.
“Pursuant to the DOE
Circular 2018-02-0003, the Meralco, through the Third Party Bids and Awards
Committee [TPBAC], hereby invites all interested and qualified parties to
participate in the CSP in respect of the following proposed supply of
electricity,” said the utility firm.
Meralco has lined up a
total of three CSPs. Meralco Utility Head Economics Lawrence Fernandez, in a
text message, said the utility firm will put up for bidding additional capacity
requirements soon. “This is the first of three invitations to bid published.
The three CSPs to be conducted are in accordance with the Power Supply
Procurement Plan that Meralco submitted to the Department of Energy [DOE],”
said Fernandez.
The CSP requires
distribution utilities (DUs) to hold competitive bidding for their supply
requirements as against securing power deals via bilateral contracts. This
is meant to ensure transparency and fair competition.
Based on the bid
invite, the 1,200-MW capacity must be supplied to Meralco for 10 years starting
December 26, 2019, up to December 25, 2029. Meralco has the sole discretion and
option to annually reduce the contract capacity by up to 600 MW from December
26, 2023, to December 25, 2025.
Meralco has set a
minimum offered capacity at 1,000 MW from interested bidders. The terms of
reference also stated that in case the supplier fails to provide power from its
nominated power plant or portfolio of power plants, WESM (Wholesale Electricity
Spot Market), or any other source, that supplier shall pay a fine equivalent to
P908 multiplied by each MW per day, which shall be used to reduce the
generation charge to the consumers.
Interested bidders must
pay a P2,500 fee per MW of offered contract capacity, submit an expression of
interest and confidentiality undertaking, and purchase bid documents from
Meralco’s TPBAC on or before July 26.
The TPBAC will conduct
a prebid conference on August 8, with submission of bids set on September
9.
In order to qualify to
bid, an interested bidder must submit until September 9 its qualification
documents, technical proposal and a bid security of P3.3 million per MW of
offered contract capacity. Bids will be opened on the same day.
7 PSAs scuttled
Meralco earlier inked
seven PSAs with several power-generation companies, including subsidiary
Meralco Power Gen Corp. The total capacity of the seven PSAs are over 3,500
MW.
However, these PSAs
were not implemented following the Supreme Court order arising from allegations
that the Energy Regulatory Commission (ERC) gave due preference to Meralco by
extending the deadline for compliance of CSP.
The ERC had moved the
CSP’s effectivity date from November 6, 2015, to April 30, 2016, exempting the
PSAs from undergoing the CSP.
Over 90 PSAs, with
about 5,000-MW capacity, were affected by the SC decision. Of these, 70 percent
of the affected PSAs are from Meralco.
The seven PSAs of
Meralco include two from MGen, which is building power plants under Redondo
Peninsula Energy Inc. and Atimonan One Energy Inc.
Atimonan’s first
2×600-MW power plant was already certified by the DOE as an Energy Project of
National Significance.
The remaining five are
with St. Raphael Power Generation Corp., Meralco’s joint venture with
Consunji-led Semirara Mining and Power Corp.; Central Luzon Premiere Power
Corp.; Mariveles Power Generation Corp.; Panay Energy Development Corp.; and
Global Luzon Energy Development Corp.
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