By Bernie Cahiles-Magkilat
The Federation of Philippine Industries (FPI) cited the signing of Power Supply Agreements (PSA) to supply Meralco 1,200 MW and 500 MW of capacity effective December 26, 2019 ensuring stable power supply for all industries.
FPI Chairman Jesus L. Arranza said the signing of the additional contract capacity is critical not jut for domestic industries’ uninterrupted operation but also for consumers.
“FPI welcomes the news of this much-needed additional power, to meet the growing demand of our country. We welcome the entry of any and all generation companies interested in contributing to the grid, in order to create a more secure power supply situation for all industries, and ultimately, all consumers,” said Arranza.
The group expressed support for the Department of Energy (DOE) Circular requiring Distribution Utilities to procure power through Competitive Selection Process (CSP). The CSP was administered by the Third-Party Bids and Awards Committee (TPBAC) that was constituted pursuant to the DOE Circular.
According to Arranza, FPI believes the correct and proper process was indeed prescribed by the DOE, and we thank the government for its hands-on approach with the CSP.
“As the entire process was personally witnessed by representatives from the DOE, industries can rest assured that the results are fair, transparent, and most importantly, beneficial to all customers and consumers of power,” he added.
The impact that these new PSAs will bring to the cost of electricity will result in additional savings and, ultimately, least cost to consumers.
“We are confident that both the distribution utility and the power generators are committed to protecting the consumer, and we know the government fully backs these efforts as well. These two straight successful CSPs are testament to that,” he added.
But what is most important, he said, is that consumers are benefitting. “Industries can only hope that the remaining members of the sector will follow suit, as the CSP promises to deliver very positive benefits to the Filipino consumer. This is only the first step, but FPI’s vision for CSP is for more and more generation companies to join the process and participate in the bids,” he added.
FPI highlighted the terms of the PSAs, emphasizing that “the generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers. The group believes that these new contracts will mean more consistent power supply for all businesses, which will positively impact and benefit industry operations, lower costs, consequently leading to more empowered consumers.”
He noted of reports which claimed that because of these newly signed PSAs, consumers are projected to enjoy total savings of around P13.86 billion per year, or a rate reduction of P0.41 per kWh.