Meralco to conduct CSP of power requirements

By  Lenie Lectura  - June 28, 2019

https://businessmirror.com.ph/2019/06/28/meralco-to-conduct-csp-of-power-requirements/

ENERGY Secretary Alfonso Cusi said on Thursday the Manila Electric Co. (Meralco) has informed him the utility firm would conduct no later than end-June a competitive selection process (CSP) of its power requirements.

“For the building capacity, I’d like to inform you that we have sat down with Meralco and we are going to already subject to CSP around 2,000 megawatts [MW] by the end of this month. It will be published already in the newspaper of national circulation for CSP to comply with the requirement of the Supreme Court ruling that was passed last month,” Cusi said.

When sought for comment, Meralco Spokesman Joe Zaldarriaga said the utility firm is “closely following the DOE’s CSP guidelines and will publish very soon the invitations to bidders to supply power to Meralco,”

Meralco, he added, would bid out “what the system needs in terms of load requirements” and that it would not matter which technology is preferred. “Technology agnostic. Hindi planta ang uunahin namin; capacity requirements muna,” Zaldarriaga stressed.

The energy chief met Meralco officials on June 13. The meeting was meant to remind Meralco that the CSP must be conducted soon in a bid to ensure a reliable and steady supply of energy.

“We must act fast because demand continues to grow and we want to be ready to supply the needs of a growing market to ensure that the country will maximize its growth potential,” Cusi said.

Under the CSP, electric cooperatives and distribution utilities must conduct a bidding for the contract of its power supply to ensure transparency and fair competition.                 

This developed after the release of the SC decision stating that “all Power Supply Agreement [PSA] applications submitted by Distribution Utilities [DUs] to the Energy Regulatory Commission [ERC] on or after June 30, 2015 shall comply with the CSP based on DOE’s 2018 Department Circular.”      

The DOE guidelines state that the form of CSP should be bidding or auction, not price challenge. 

Over 90 PSA cases are covered by the SC decision. Seven of which are PSAs entered into between Meralco and several power producers, including with Meralco’s power generation arm, MeralcoPower Gen Corp. (MGen).

These seven PSAs make up about 3,500 MW in total capacity.

Meralco’s PSA are with two subsidiaries of MGen, which is building power plants under Redondo Peninsula Energy Inc. and Atimonan One Energy Inc.  It also has a PSA with St. Raphael Power Generation Corp., its joint venture with Consunji-led SMPC. 

Meralco earlier inked PSAs with Central Luzon Premiere Power Corp., Mariveles Power Generation Corp., Panay Energy Development Corp. and Global Luzon Energy Development Corp.

Atimonan One Energy Inc.’s first 2x 600MW power plant was already certified by the DOE as an Energy Project of National Significance.

MGen noted that if this power project had been approved on time, then at least 600 MW would have been added to the grid this year.

“We have already reached in April the peak demand level that was recorded in May last year. At least 626 MW is needed and this is just about the estimate that the DOE keeps on saying. So, the DOE is right in saying that we need new capacity of 600MW every year as demand keeps rising,” MGen president Rogelio Singsgon noted.

Singson said Thursday MGen would participate in the CSP.