Delay may result in power rate increase
The Manila Electric Co. (Meralco) yesterday reiterated that the conduct of the Competitive Selection Process (CSP) for its supply requirements is in accordance with the existing rules of the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) and complies with the mandate under the EPIRA to secure the least-cost supply in an open and transparent manner.
"None of the prospective bidders, even the generation companies that use the Malampaya gas, raised issues that can be a basis for postponing the bidding; hence, Meralco has no valid ground to do so," Meralco Senior Vice President and Head of Regulatory Management Jose Ronald V. Valles said.
Meralco emphasized that the Terms of Reference (TORs) have certificates of conformity from the DOE. In fact, the ERC found Meralco's recent 1200MW CSP to be fully compliant with existing laws and regulations, which is why the ERC gave a Provisional Authority to implement the resulting Power Supply Agreement (PSA), the company said.
The power distributor added that First NatGas' San Gabriel plant participated in this particular CSP and submitted a very high price, which resulted in it becoming non-compliant.
"Again, any generation company can submit offers for these CSPs. While we prioritize power plants using indigenous fuel as DOE requires, we must 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 compliant bidder that offered the lowest cost", Valles reiterated.
In a statement, Meralco also clarified that the Santa Rita and San Lorenzo plants, which use Malampaya natural gas, could not join the earlier 1800MW baseload CSP because they are still fully contracted with Meralco on the delivery date of the requirements. These plants have no extra capacity that can supply Meralco's 1800 MW requirements.
The company explained that while San Gabriel, another plant that uses Malampaya gas, joined the bidding for 1,200 MW capacity, its offer of P8.45 per kWh is still beyond the reserve price set for that CSP and was deemed non-compliant. It added that The offer was significantly higher than the winning bid of about P7 per kWh.
"Contrary to some misleading allegations, the TORs for all Meralco CSPs apply to all bidders without discrimination or preferential treatment, and the Reserve Prices, including the bid offers submitted by the bidders, are inclusive of all costs, including fuel and fuel-related costs, with no hidden charges. No costs that the bidder did not submit will be allowed as pass-through charges under the PSAs," the Meralco statement said.
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