Meralco declares failed bidding for 1,200 MW supply

By Myrna M. Velasco – September 10, 2019, 10:00 PM
from Manila Bulletin

Power utility giant Manila Electric Company (Meralco) has declared “failure of bidding” on its competitive selection process (CSP) for the supply of 1,200 megawatts (MW) starting 2024.

MERALCO logo

MERALCO logo

The failed bid declaration was decided by Meralco’s third party bids and awards committee (TPBAC) following the withdrawal of two of its targeted bidders; and the non-appearance of another interested party.

The third party bid body announced that Mariveles Power Generation Corporation of the San Miguel group “submitted a letter informing the TPBAC of its withdrawal of participation in (the) bidding process” as of 8:45 a.m. on bidding date (September 10).

Further, the TPBAC indicated that “at the 9:00 a.m. deadline, the remaining interested bidder First Gen Corporation/First Gen Ecopower Solutions failed to arrive and submit its document submissions.”

Of the four interested parties, only Atimonan One Energy Inc. of Meralco PowerGen was able to submit a tender because the other interested bidder, PanAsia Energy Inc., had manifested its intention to withdraw as early as August 28.

Given the circumstances, the TPBAC chaired by lawyer Ferdinand A. Domingo stated that there was determination of “a failure of bidding and has resolved to report back to the distribution utility on this matter.”

The bid body expounded that “the reserve price envelope was delivered back to the TPBAC by the escrow/custodian agent for the TPBAC to return it back to the distribution utility.”

In a related development, the TPBAC was scheduled to issue yesterday (September 10) the notices of award to the two San Miguel Corporation subsidiaries and the PHINMA Energy Corporation for their rated “best bids” in the 1,200MW brownfield capacity supply procurement of Meralco that will be tied to 10-year power supply agreements.

The biggest capacity bid that was accepted for 670MW was from South Premiere Power Corporation, the operator of the 1,200MW Ilijan plant of the San Miguel group. Its headline rate offer had been at P4.6314 per kilowatt hour (kWh) and all-in levelized cost of energy (LCOE) at P4.9300 per kWh (inclusive of value added tax).

The other qualified tenders are the 330MW of San Miguel Energy Corporation with a headline rate of P4.6314 per kWh and LCOE of P4.9299 per kWh; and that of PHINMA Energy had been for 200MW at a headline rate of P4.7450 per kWh and LCOE of P4.8849 per kWh.

The San Miguel group submitted two more bids from its Masinloc Power Partners Co. Ltd. and SMC Consolidated Power Corporation subsidiaries, but these no longer made the cut into the qualified “best bids”.
In a statement to the media, Meralco noted that the brownfield capacities placed under CSP will have to start supplying to it by December 26 this year.

Following Monday’s CSP exercise, the auction body of Meralco’s supply sourcing stipulated that “the TPBAC made the findings based on a non-discretionary pass-fail’ assessment for completeness” after determining that “there was no failure of bidding.”

The next steps for the winning parties will be the signing of power supply agreements with Meralco and proceed to joint filing with the Energy Regulatory Commission (ERC) for the approval of the contracts.

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