By Othel V. Campos – July 03, 2019 at 07:55 pm
The Philippine Competition Commission approved the proposed joint venture between state-run Bases Conversion and Development Authority and the consortium of Manila Electric Co. and its Japanese partners for the development of a power distribution system in New Clark City.
PCC records showed the consortium would be comprised of Meralco, Japanese conglomerate Marubeni Corp. and power distributors Kansai Electric Power Co. Inc. and Chubu Electric Power Co.
The transaction of BCDA and the Meralco-Marubeni Consortium will create a joint venture company that will distribute power to locators and facilities in New Clark City in Tarlac province for an initial period of 25 years.
Under the deal, the consortium will have a 90-percent equity stake in the joint venture company, while BCDA will own the remaining 10 percent.
PCC said in a decision on June 25 the transaction would not affect the competition in the retail electricity supply market within New Clark City and the distribution utility market of generated electricity through a supply agreement in the Luzon and Visayas grids.
It said as New Clark City could give rise to establishments or units that are qualified to choose their own retail electricity suppliers, these potential “contestable customers” in the area would still be able to choose their own power provider and not necessarily the joint venture company.
PCC said that given the development of New Clark City, it was expecting an influx of potential locators, particularly agro-industrial and institutional clients to qualify as contestable customers.
Contestable customers are consumers with an average monthly consumption of at least 750-kilowatts and are deemed by the Energy Department as qualified establishments to participate in the electricity open access scheme and choose their own retail electricity supplier.
These retail power suppliers from anywhere in the country may compete for the would-be qualified New Clark City locators in need of the supply, it said.
The competitive selection process of the Energy Department ensures other distribution utilities and electric cooperatives may compete with the joint venture company in securing electricity from power generators, according to PCC.
The CSP is considered an important competitive step that would constrain the joint venture’s ability to foreclose other power generation companies.
BCDA is a government-owned and controlled corporation engaged in public-private partnerships to develop public infrastructures such as tollways, airports, seaports, and major real estate developments.
Marubeni and its consolidated subsidiaries are engaged in the handling of products and provision of services in the areas of import and export.
It also conducts business investment, development and management.