Senator calls for deferment of Meralco’s 600-MW power supply bidding

Senator Alan Peter Cayetano seeks a deferment to next month's bidding for Meralco’s 600-megawatt (MW) power supply requirement amid concerns over fairness.

In a statement, Cayetano questioned the terms of reference (TOR)  set by Meralco for the upcoming competitive selection process (CSP) for its 600-MW baseload requirement, which he claimed were unfair for older power suppliers such as the Malampaya gas field.

“I think you should postpone August 2 and look into, sort this out first,” Cayetano said, referring to the date of the CSP.

“Can we honestly say that we are promoting indigenous gas in the Philippines?” Cayetano asked.

The senator claimed that he found a phrase in Meralco’s TOR discriminatory because it effectively disqualified Malampaya-fueled power plants.

Cayetano was referring to the phrase  “if the plant is more than 10 years old” as indicating that older power plants were automatically disqualified from taking part in the CSP.

The senator said there was a pressing need to address the lingering issue of the high cost of power affecting both investors and consumers.

No preferential treatment

Sought for comment, Meralco Vice President and Head of Corporate  Communications Joe Zaldarriaga said that the power distributor “strictly observes and follows the requirements and standards set by the  government, which includes securing prior approval from the Department  of Energy (DOE) of our Power Supply Procurement Plan and the  corresponding Terms of Reference (TOR) for every CSPs.”

“In addition, these TORs also considered suggestions of the Energy  Regulatory Commission (ERC) Chairperson before they were published,”  Zaldarriaga added.

The Meralco official emphasized that any generation company can submit offers for these CSPs.

“There is no preferential treatment and Meralco always awards the contracts to the lowest compliant bidder,” Zaldarriaga said.

The Meralco official said that for the power distributor’s 600-MW  requirement, eight companies, including First Gas Power Corp. and First  NatGas Power Corp., which sources fuel from Malampaya, expressed interest in submitting offers.

The other generation companies are  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.

“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 bids and least-cost supply that will really benefit our customers,”  Zaldarriaga said.

The Meralco official added that all resulting PSAs would also have to undergo the ERC's review and approval process before implementation. — DVM, GMA Integrated News