The Manila Electric Co. (Meralco) assured that it practices the government-mandated competitive selection process (CSP), which involves an open and transparent manner to ensure that consumers benefit from sufficient least-cost supply.
“We would like to reiterate that Meralco strictly observes and follows the requirements and standards set by the government, which includes securing prior approval from the Department of Energy (DOE) of our Power Supply Procurement Plan and the corresponding Terms of Reference (TOR) for every CSPs,” said Joe R. Zaldarriaga, Meralco vice president and head of corporate communications.
“In addition, these TORs also considered suggestions of the Energy Regulatory Commission (ERC) Chairperson before they were published,” he added.
READ: Cayetano calls for suspension of Meralco’s bid for 600 MW baseload supply
CSP observers, including the DOE and consumer groups, witness the submission and opening of bids while the proceedings are streamed live to ensure transparency and fairness.
“Any generation company can submit offers for these CSPs. There is no preferential treatment and Meralco always awards the contracts to the lowest compliant bidder,” Zaldarriaga further said.
In the recently completed CSP for its 1,200-MW baseload requirement, Meralco awarded the power supply agreement to South Premiere Power Corporation after it submitted the lowest offer of P7.0718 per kilowatt per hour (kWh).
It bested the P7.1006 per kWh offer of the joint venture of Limay Power Inc. and San Roque Hydropower Inc. for 150MW capacity; and First Natgas Power Corporation’s bid of P8.4489 per kWh.
Meanwhile, First Natgas, which uses the indigenous Malampaya gas for the San Gabriel power plant, needed to be more compliant as the offer went beyond the reserve price set for the bidding.
“Awarding the contract to a generation company that submitted the highest and non-compliant bid goes against the rules,” Zaldarriaga said.
Eight companies, including First Gas Power Corp. and First NatGas Power Corp., which sources fuel from Malampaya, expressed interest in submitting offers for Meralco’s 600-MW requirement.
The other generation companies are Mariveles Power Generation Corp., Masinloc Power Co. Ltd., GNPower Dinginin and Therma Luzon, Inc., Southwest Luzon Power Generation Corp., and Quezon Power (Philippines) Limited Co.
“Just like all our other CSPs, we are hoping that all these companies will submit their offers to maximize competition. This will allow them us to secure the best bids and least-cost supply that will really benefit our customers,” Zaldarriaga said.
All resulting power supply agreements will also have to undergo a review and approval process by the ERC before implementation.