Meralco gets 22 offers from gencos for CSP on 3 deals

By Lenie Lectura – July 30, 2019
from Business Mirror

THE Manila Electric Co. (Meralco) has received 22 offers from various power-generation companies (gencos) that are interested to participate in the competitive selection process (CSP) of three power contracts with a total capacity of 2,900 megawatts (MW).

Meralco will bid out the following contracts: a five-year contract for 500 MW, a 20-year contract for 1,200 MW and a 10-year contract for 1,200 MW.

“There are seven bidders for the 500 MW, 11 bidders for the 1,200 MW contract that will start in 2020, and four bidders for the 1,200 MW contract that will start in 2024,” said Meralco Utility Economics Head Lawrence Fernandez during a press conference on Monday.

Company officials did not identify the interested bidders. However, they confirmed that Meralco PowerGen Corp., the power-generation arm of Meralco, has submitted a letter of interest to bid for the 1,200 MW contract that starts in 2024.

Earlier, San Miguel Corp. and MGen said they were looking at participating in the CSP.  Aboitiz Power Corp.  and First Gen are also expected to participate.

Semirara Mining and Power Corp. (SMPC) Chairman Isidro Consunji had said that the published requirements “carry very difficult conditions.”

When sought for comment, Fernandez said the terms of reference were strictly reviewed by the third-party bids and awards committee.

“In fact, some of the terms in the contract, particularly the penalty for outage, came from DOE. The prices also adhere to the DOE’s terms,” said Fernandez.

The CSP requires distribution utilities (DUs) to hold competitive bidding for their supply requirements as against securing power deals via bilateral contracts. This is meant to ensure transparency and fair competition.

Meralco earlier inked seven PSAs with several power-generation companies, including two from MGen, which is building power plants under Redondo Peninsula Energy Inc. and Atimonan One Energy Inc.

The remaining five are with St. Raphael Power Generation Corp., Meralco’s joint venture with Consunji-led SMPC; Central Luzon Premiere Power Corp. (CLPPC); Mariveles Power Generation Corp. (MPGC); Panay Energy Development Corp.; and Global Luzon Energy Development Corp.

CLPPC and MPGC are under SMC Global Power Holdings, the power arm of SMC.

However, these PSAs, with a total capacity of over 3,500 MW, were not implemented following the Supreme Court order arising from allegations that the Energy Regulatory Commission gave due preference to Meralco by extending the deadline for compliance with the CSP rule.

The SC decision requires all power-supply agreements forged after June 30, 2015, to undergo the CSP.