Bidding for power supply contracts above board, says Meralco

By: Ronnel W. Domingo - 04:05 AM January 06, 2021
https://business.inquirer.net/315259/bidding-for-power-supply-contracts-above-board-says-meralco

Manila Electric Co. (Meralco) maintains that its ongoing efforts to secure additional electricity supply through competitive bidding of contracts are above board as these are approved by the Department of Energy (DOE) and follow limits on ownership set by law.

The electricity distribution giant was reacting to Bayan Muna party list Rep. Carlos Isagani Zarate questioning the latest of Meralco’s competitive bidding selection process (CSP), through which the company intends to tap power plants for output totaling 1,800 megawatts.

Following a Supreme Court decision issued in 2019 that requires distributors to conduct CSPs for supply contracts, Meralco in that same year was able to sign six contracts that represent a total of 1,700 MW of generating capacity.

Meralco conducted two rounds of CSPs, one for a total of 1,200 MW and another for a total of 500 MW. The resulting six power supply agreements were signed with subsidiaries of the Ayala and San Miguel groups.

For the latest round of CSP for Meralco, Atimonan One Energy Inc. a unit of Meralco subsidiary Meralco Powergen Corp.—is participating along with 17 other interested suppliers.

Before this, Meralco set out on a CSP for 1,200 MW, which was declared a failure since only Atimonan One submitted a bid.

Meralco reassured the public and stakeholders that the process continues to comply with all standards set by government and regulator in order to achieve the lowest possible cost for consumers.

Lawrence Fernandez, vice president and head of Meralco’s utility economics department, said in a statement the terms of reference for the conduct of the latest CSP had been reviewed and approved by the DOE.

“[A]ll contracts that will result from the bidding process are subjected to regulatory proceedings and evaluation by the ERC (Energy Regulatory Commission),” Fernandez said.

As for talks about banning cross ownership—the ownership of assets across different segments of the electricity industry, such as power plants and distribution networks—the Meralco vice president said they were already following restrictions set under the Electric Power Industry Reform Act of 2001. INQ