A group of electricity users has welcomed what it described as the “successful Manila Electric Co. bidding for both 1,200 megawatts and 500 megawatts contract capacities.”
The bidding, the group said, is an expression of support for the Duterte administration’s vision of lower power rates by spearheading the Competitive Selection Process.
In a statement, the Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya para sa Mamamayan (AGHAM) commended the Department of Energy led by Secretary Alfonso Cusi for issuing the 2018 DOE Circular on Competitive Selection Process, which was upheld by the Supreme Court.
“We thank Secretary Cusi for immediately implementing the Supreme Court decision, and for closely overseeing the Meralco bidding/competitive selection process. Ultimately, we believe that the CSP process will cut down the generation charge of electricity rates,” AGHAM said.
AGHAM also highlighted the efforts of the distribution utility, pointing out that “the group thanks Meralco for conducting a fair and transparent bidding/CSP in accordance with the 2018 DOE Circular, which resulted in the award of PSAs to Phinma, SMEC and SPCC on basis of generation charges that were much lower than currently prevailing generation charges from gas and coal power generation companies.”
On Sept. 9, Meralco informed the public that PHINMA Energy Corp., San Miguel Energy Corp. and South Premiere Power Corp. were declared the best bids for the 1,200 MW contract capacity, to supply Meralco for a term of 10 years. On Sept. 11, it was announced that the Best Bids for 500 MW of mid-merit capacity for a term of 5 years were those of First Gen Hydro Power, Phinma Energy and South Premiere.
AGHAM also commended the government’s CSP, saying “it was very encouraging to see Meralco for ensuring that the bids will be lower than current generation charges through the mechanism of a sealed reserve LCOE cap, which was lower than prevailing generation charges. In fact, the bids of Phinma, SMEC and SPCC were even lower than Meralco’s reserve LCOE cap, thus proving that the Meralco bidding created a very price competitive atmosphere which resonates across all bidders.”
“The resulting prices from the CSP are significantly lower than their average generation cost today of around P5.88 per kWh (VAT inclusive). And based on the news, along with the results of first successful CSP, consumers are projected enjoy total savings of around P13.86 billion per year or a rate reduction of P0.41 per kWh,” Agham said.