THE Manila Electric Co. (Meralco) Wednesday said it has not received yet the temporary restraining order (TRO) issued by the Taguig Regional Trial Court (RTC) against the conduct of the competitive selection process (CSP) for additional power supply.
“We would like to stress however that all CSPs for our supply requirements are done in accordance with existing rules of Department of Energy (DOE) and Energy Regulatory Commission (ERC). It is our mandate to ensure that we conduct these in a timely manner, as delay will expose our consumers to unnecessary burden in the amount of billions of pesos in the form of higher power rates,” senior vice president and head of regulatory management office Jose Ronald Valles said.
The Taguig RTC on Wednesday issued a TRO, stopping Meralco from conducting bidding for additional power supply of 600 megawatts (MW) and 400MW.
Taguig RTC Branch 15-FC Executive Judge Byron San Pedro, in a five-page order promulgated on July 31, 2024, granted the plea of the members of the consortium operating the Malampaya gas field for the immediate issuance of the 72-hour TRO against Meralco’s conduct of CSP for its 600 MW and 400 MW power supply requirements after finding merits to the verified complaint by the plaintiffs.
The Malampaya consortium members are composed of Prime Energy Resources Development B.V., Prime Oil and Gas Inc, UC38 LLC, and state-run Philippine National Oil Exploration Corp. (PNOC-EC).
“Wherefore, acting on the basis of the allegations of the plaintiffs and on the strength of the evidence as presented in the complaint . . . the plaintiffs’ application for a 72-hour temporary restraining order is hereby granted, subject to posting of bond,” the order stated.
“Upon posting a TRO bond which is hereby fixed in the amount of five million pesos (P5,000,000), let a Temporary Restraining Order effective for 72 hours be issued in favor of the plaintiffs-applicants enjoining the respondent Manila Electric Company from conducting its competitive bidding selection process (CSP), under its current Terms of Reference, including the receipt of bids, the award and the implementation of any award arising from (it),” the RTC order read.
Eight companies have expressed interest for the 600 MW baseload supply, specifically, First Gas Power Corp., First NatGas Power Corp., 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.
Six companies also expressed interest for the 400 MW and were supposed to attend the pre-bid conference scheduled on Thursday.
“Upon evaluation of the allegations contained in the verified complaint for injunction, it appears from the facts shown that great or irreparable injury would result to the plaintiffs-applicants before the writ of preliminary injunction could be heard. In other words, there exists extreme urgent necessity for the writ as to warrant the issuance of temporary restraining order to prevent further damages to the plaintiffs’ interests, the government and the environment,” the court ruled.
“We would like to stress however that all CSPs for our supply requirements are done in accordance with existing rules of Department of Energy (DOE) and Energy Regulatory Commission (ERC). It is our mandate to ensure that we conduct these in a timely manner, as delay will expose our consumers to unnecessary burden in the amount of billions of pesos in the form of higher power rates,” Valles said.
The Taguig RTC acted on the 54-page complaint filed by the members of the Malampaya consortium who argued that the bid terms violate the preference given to indigenous natural gas under existing laws, and creates a direct threat to the country’s energy security and energy sovereignty.
They said Meralco’s bidding done through CSP was “flawed, skewed or supplier-driven and grossly violative of existing laws, rules and regulations.”
The petitioners sought the issuance of the 72-hour TRO against Meralco prior to a permanent injunction. They said that without a TRO, the bidding would proceed and render the case moot.
The Meralco CSPs for the new power supplies are scheduled on August 2 for the 600 MW and August 9 for the 400 MW.
The parties referred to provisions in the Electric Power Industry Reform Act (EPIRA) and orders issued by the Department of Energy (DOE) which gives preference to local natural gas in power generation.
The Meralco TOR for the scheduled bids “unduly disadvantages power suppliers which use ING (indigenous natural gas) as a fuel source,” the petition read.
The TRO was urgent, it said, because without it power suppliers using indigenous gas would be fenced off in the bidding for 600MW and 400MW.
“Increased reliance on imported sources of fuel threatens the country’s energy security and energy sovereignty because these are greatly susceptible to a volatile market,” the petition said.
The petitioners said that if the biddings push through, it “would put the country in a situation where a significant portion of our power supply is placed in the hands of imported coal and imported LNG, the prices of both are notoriously unstable and extremely subject to external shocks in the market.”
The petitioners pointed out that the conduct of the CSPs do not accurately reflect least cost available, as the terms allow imported LNG and coal-based power plant bidders to use lower reference costs, only to later pass on higher cost of fuel and actual non-fuel commodity costs to consumers.
This is in contrast to bidders using indigenous natural gas that submit an “as-is, where-is” price during the CSP.
They said awarding PSAs only to suppliers using imported fuel will also harm the exploration and development of indigenous resources, and will affect the Malampaya project, which has been reliably and securely supplying natural gas to power plants that provide 30 percent to 40 percent of Luzon’s electricity requirements.
Government revenue from Malampaya had already reached P374 billion as of 2023. At least P26 billion was earned by the government in 2022 alone.
