SMC wins Meralco’s 1,800MW supply deal

Two subsidiary firms of diversifying conglomerate San Miguel Corporation (SMC) tendered the lowest bid for the competitive selection process (CSP) for the supply of 1,800 MW power capacity to Manila Electric Company (Meralco) over a 20-year year period.  

The winning SMC companies are Excellent Energy Resources Inc. (EERI) and Masinloc Power Partners Ltd. Co. EERI cornered 1,200MW of capacity for gas-fired power generation with its price offer of P4.1462 per kilowatt hour (kWh), while its other subsidiary Masinloc Power Partners Ltd. Co. won 600MW capacity for a price bid of P4.2605 per kWh.

SMC president and COO Ramon S. Ang

Based on its 20-year power supply agreements, both firms will supply the distribution utility giant Meralco power starting 2024.

SMC President Ramon S. Ang indicated that they are “just lucky” to have tendered the winning offers in the auction.

In a statement to the media, the third party bids and awards committee (TPBAC) of the Meralco CSP qualified that the two price-offers of the SMC firms have been rated as the “best bids” -- out of the six offers cornered in the CSP of the utility firm. The TPBAC also emphasized that “the opening of the qualified bid prices was observed by the representatives of the Department of Energy.”

The TPBAC  further noted that the winning offers have been “significantly below the LCOE (levelized cost of energy) reserve price of P5.2559 per kWh.”

In particular, the price offer of Masinloc Power for 600MW capacity coal-fired generation had been ranked lower versus the bids of Mariveles Power Generation Corporation (MPGC) at P4.3321 per kWh; Atimonan One Energy Inc. (A1E) at P4.6338 per kWh; and GNPower Dinginin Ltd. Co. (GNPD) at P5.25 per kWh. TPBAC Chairman Atty. Ferdinand A. Domingo said the CSP was carried out “in full compliance with all rules and regulations issued by the DOE.” The outcome of the CSP had also been transmitted to the energy department.

Domingo added “the terms of reference (TOR) were reviewed and approved by the DOE, and all contracts that will result from the bidding process will be subjected to regulatory proceedings and evaluation by the ERC (Energy Regulatory Commission).”

MPGC is a joint venture between SMC Global Power Holdings and Meralco PowerGen, the power generation investment arm of Meralco. A1E is a corporate vehicle of Meralco PowerGen for its proposed Atimonan project, while GNPD is a joint venture between Aboitiz Power Corporation and AC Energy and Infrastructure Corporation (ACEIC) of the Ayala group.

The other bidder is St. Raphael Power Generation Corporation of the Consunji group, but it submitted a price tender of P5.4426 per kWh, which failed to meet the reserve price, according to the TPBAC.

And to ensure the integrity of the CSP process, the TPBAC had engaged the assistance of experts from Leidos, a global engineering firm, on the evaluation of the offers.