Panay Energy Development Corporation (PEDC) submitted the ‘lowest bid’ in a competitive selection process (CSP) carried out by power utility giant Manila Electric Company on Friday, Nov. 19, for its procurement of additional 70-megawatt supply.
According to the third party bids and awards committee (TPBAC) of Meralco, the tender of PEDC, which is an affiliate firm of Meralco, was for a total headline rate of P2.9906 per kilowatt hour (kWh) and levelized cost of electricity (LCOE) rate of P2.948 per kWh.
“The offer was below the reserve prices of P5.0268 per kWh for the headline rate and P3.7898 per kWh for the LCOE rate that were set for the bidding,” the utility firm said.
The other bidders in the Meralco CSP had been SEM-Calaca Power Corporation of the Consunji group with headline rate offer of P4.8737 per kWh and LCOE of P5.2894 per kWh; while Therma Luzon Inc. of the Aboitiz group had a price tender of P4.7 per kWh and LCOE of P5.1650 per kWh.
The other qualified bidder in that supply procurement was Quezon Power Philippines Ltd. (QPPL), but it formally withdrew from the bidding process.
Lawrence S. Fernandez of the TPBAC secretariat and also vice-president and head of utility economics department of the power firm noted, “as a regulated entity, Meralco has conducted its business in full compliance with all rules and regulations issued by the ERC (Energy Regulatory Commission) and DOE (Department of Energy).”
He explained that the terms of reference (TOR) for the supply auction “were reviewed and approved by the DOE, and all contract resulting from this bidding process shall be subjected to regulatory proceedings and evaluation by the ERC.”
Prior to issuance of the notice of award and the signing of power supply agreement (PSA) between Meralco and PEDC, the procuring power utility company indicated that the TPBAC will have to undertake post-qualification evaluation of the bid first.
Meralco’s TPBAC emphasized that “the committee’s findings were based on a pass/fail assessment of the qualification documents for completeness.”
Atty. Ferdinand Domingo, chairman of the TPBAC for the power firm’s CSP, conveyed that “the TPBAC complied with its mandate to conduct the bid in an open and transparent manner to achieve the least cost of electricity.”
He further stated that the proceedings were carried out in compliance with Department Circular No. 2018-02-0003 issued by the DOE in 2018. The circular was also upheld in a ruling of the Supreme Court in 2019, requiring the conduct of CSP for the supply procurement of all private distribution utilities and electric cooperatives.
.