Manila Electric Co., the biggest retailer of electricity, has issued two invitations for a price challenge to supply a combined 100 megawatts of solar power.
Meralco said it issued the two separate price challenge invitations as part of the compliance to the rules of the Energy Regulatory Commission on the competitive selection process.
The first invitation asked interested and qualified parties to participate in the price challenge to the offer of P5.39 per kilowatt-hour from PowerSource First Bulacan Solar Inc., subject to a two-percent annual escalation and one-time foreign exchange adjustment.
PowerSource’s proposed power plant is located in Barangay Labne, San Miguel, Bulacan or in an alternative sit within Meralco’s franchise area.
The contract covers 20 years, with the start of commercial operations is set on August 2018.
Meralco issued the second price challenge to the offer of Solar Philippines Tanauan Corp. for 50 MW at P5.39 per kWh, also subject to escalation and foreign exchange adjustment.
Solar Philippines is putting up power plants with a capacity of 25 MW each in Batangas and Cavite provinces.
Solar Philippines offered to supply Meralco starting in February 2017 for 20 years.
“Any offer made by the price challenge should be under the same terms and conditions of the power supply agreement provided by Meralco, except for the financial proposal,” the power distributor said.
Meralco said it would declare a failure the price challenge if it did not receive any expression of interest on Oct. 3.
Meralco senior vice president and head of utility economics Lawrence Fernandez said the agreements with the two solar developers reflected the company’s support to renewable energy.
Fernandez said Meralco had generated a rate lower than the feed-in tariff for solar resulting in savings to consumers.
“Meralco continues to work to get the lowest rates to consumers and we are requesting policy makers to review proposals to continue incentives for developers in the light of making our electric service more globally competitive,” Fernandez said.
“I think if the market will use the proper mechanism for that, that there will be no need for subsidy to solar power plant developers. There are solar power plants that can compete with commercial market,” he said.
Meralco earlier bared plans to also develop solar power projects and started talks with possible local joint venture partners to diversify its power generation portfolio.