Cayetano seeks delay in Meralco’s power supply bidding for review

MANILA, Philippines — Senator Alan Cayetano filed a resolution seeking to postpone the Manila Electric Company’s (Meralco) bidding for 600-megawatt and 400-megawatt power supply requirements.

In filing Senate Resolution 1090 on July 29, Cayetano said Meralco’s terms of reference (TOR) should first be reviewed to ensure fairness in the selection of bidders and attain the lowest cost possible energy supply.

Cayetano also underscored that the current rules of Meralco’s competitive selection process (CSP) remain unclear and may put certain bidders at an advantage at the expense of power suppliers that use indigenous natural gas.

“The Terms of Reference (TOR) of CSP 1 and CSP 2 do not reflect the real preference afforded to indigenous natural gas and its full utilization,” he wrote in the resolution.

According to the Senator’s camp in a statement on Tuesday, the resolution was filed after Cayetano raised similar concerns during a public hearing by the Senate Committee on Energy on July 18 where he pointed out that Meralco seemed to favor power generation companies that utilize imported coal.

Due to this, Cayetano in the resolution said the Malampaya indigenous natural gas will be unutilized “if the indigenous natural gas-powered plants are not given a chance to fairly compete in CSP 1 and CSP 2.”

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This, he said, is “contrary to the policy and objectives of the Epira (Electric Power Industry Reform Act) and Department Order No. 002023-10-0022 of transitioning to a clean energy mix.”

Furthermore, Cayetano said Meralco’s TOR treats historical actual costs of non-fuel items as merely evaluative and non-binding, which puts indigenous natural gas suppliers at a disadvantage.

“The lack of clarity in the rules regarding TORs in the biddings will result in the underutilization of our indigenous natural gas [and] open the possibility of circumventing the distribution utilities’ obligation to supply their captive customers in the least-cost manner,” he said through the resolution.

“The CSP must ensure fairness and competition in the bidding process so that only power suppliers offering the true least-cost supply will be contracted,” he added.

Cayetano also noted that Meralco could influence the results of the bidding by altering the definitions of certain concepts, such as “greenfield.”

The Energy Regulatory Commission defines “greenfield” as projects that are not yet existing, constructed, or financed.

But in Meralco’s TOR, “greenfield” refers to plants operational as of January 2020.