Power utility giant Manila Electric Company (Meralco) will be issuing amended terms of reference (TOR) for its competitive selection process (CSP) on the targeted 1,800-megawatt capacity procurement that is scheduled for tenders-submission on December 27 this year.

In a briefing with reporters, Atty Jose Ronald Valles, senior vice president and head of regulatory affairs of Meralco, indicated that the modification in the CSP’s TOR is in compliance with the recommendation of Energy Regulatory Commission (ERC) Chairperson Monalisa C. Dimalanta.

“We have already incorporated in the TOR. One major change there is capping of the maximum offered capacity at 1,200 megawatts. We recommended that and she agreed to it…we will just amend the TOR through a bid bulletin,” he said.

Under the original bidding terms, Valles noted that “any bidder can offer a maximum of 1,800MW,” but that had been flagged by the ERC because that might entail anti-competitive behavior in the market if there’s just a single company supplying that scale of capacity.

On the slated CSP before yearend for the targeted 15-year power supply agreements (PSAs) to be underwritten for the 1,800MW capacity procurement, Valles specified that “as of now, the schedule remains, but we have written the ERC chair … we’re seeking guidance if we can proceed with the bid opening on December 27.”

In the offers, he emphasized that winning bidders could be two firms with capacities of 1,200MW and 600MW; or it could also be several firms because the minimum offer had been set at 150MW -- and that can be procured through the ‘capacity stacking system’ prescribed in the TOR.

The warranted facilities which would deliver that supply portfolio to Meralco are those that have reached commercial operation date (COD) on their facilities starting January 2020; because the company prefer newer plants to be supplying this chunk of its power requirements.

Valles expounded that the tender process sets ‘technology neutral’ approach – but if there would be the same price offers; and one of the generating facilities use cleaner fuel like gas versus coal -- then the award will likely go to the gas plant.

In the same vein, he stressed that if two firms have the same price bid – and one of them is utilizing liquefied natural gas (LNG) and the other is drawing fuel from Malampaya, then it is the indigenous gas user that will be bestowed with a contract award.

“For the 1,200, there was an advisory from the Department of Energy to encourage prioritization of indigenous fuel so we incorporated that in the TOR, so effectively, we are encouraging the plants using Malampaya gas to join the bidding,” he conveyed.