Manila Electric Co. called on all interested bidders of its 600-megawatt power supply requirement to meet the bid submission deadline on Aug. 2 to maximize competition and open the best bid for consumers.
The eight companies are 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.
Meralco is conducting the competitive selection process for its 600 MW of baseload supply to meet its requirements starting next year.
“Just like all our other CSPs, we are hoping that all these companies will submit their offers to maximize competition. This will allow us to secure the best bid and least-cost supply that will really benefit our customers,” Meralco vice president and head of corporate communications Joe Zaldarriaga said.
“We emphasize that Meralco does not amend the rules or TORs [terms of reference] for our CSP to favor one generation company or limit competition because that is obviously discriminatory and anti- competitive,” Zaldarriaga said.
Zaldarriaga also said the CSP is a government-mandated bidding to ensure that only power suppliers that offer least cost supply would be contracted by a distribution utility to protect consumers against high power rates.
He said the CSP, as approved by the Department of Energy and Energy Regulatory Commission, is an open and transparent bidding, where consumers of electricity are allowed to observe.
He said Meralco strictly follows the requirements of CSP prescribed by the government, which includes securing prior approval from the DOE of the power supply procurement plan and the corresponding TOR for every CSP.
Zaldarriaga said that for the 1,800MW and 1,200 MW CSPs, the TORs also considered suggestions of ERC chairperson Monalisa Dimalanta before they were published.
He said that to further ensure transparency and fairness, CSP observers, including the DOE and consumer groups, witness the submission and opening of bids. The proceedings are also streamed live.
He said the TOR ensures a level playing field for all generation companies participating in the bidding because all the rules apply to all bidders without exception, and all bidders are required to include all their costs in their bid offers for purposes of determining the lowest and winning bid.
Zaldarriaga said no hidden costs are allowed to be charged to consumers under Meralco CSPs.
He said tailor fitting to favor a particular generation company is prohibited and Meralco’s TORs promote competition by ensuring that more generation companies are able to participate and offer competitive rates, while at the same time encouraging entry of new or greenfield power plants to replace old and unreliable power plants.
“Any generation company can submit offers for these CSP. While we prioritize power plants using indigenous fuel as required by DOE, we ensure that it will not violate our least cost mandate under the law. There is no preferential treatment and Meralco always awards the contracts to the lowest compliant bidder,” Zaldarriaga said.
He said that in its recently completed CSP for its 1,200-MW baseload requirement, Meralco awarded the power supply agreement to South Premiere Power Corp. after it submitted the lowest offer of P7.0718 per kWh.
It bested the P7.1006 per kWh offer of the joint venture of Limay Power Inc. and San Roque Hydropower Inc. for 150 MW capacity; and First Natgas Power Corp.’s bid of P8.4489 per kWh.
First Natgas was deemed non-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 clearly violates the law and existing regulations. Even ERC found that our CSP for the 1200MW has complied with all legal requirements when it issued a Provisional Authority,” Zaldarriaga said.
