Meralco says ‘no valid ground’ to postpone bid

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MANILA, Philippines — The Manila Electric Company (Meralco) said on Tuesday that there is “no valid ground” for it to postpone its bidding for power supply requirements, insisting that both its Terms of Reference (TORs) and Competitive Selection Process (CPS) are in accordance with the existing rules of the government.

This is after Senator Alan Cayetano filed a resolution seeking the postponement of Meralco’s bidding for 600-megawatt and 400-megawatt power supply requirements.

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

In the resolution, Cayetano said Meralco’s TORs should first be reviewed to ensure fairness in the selection of bidders and attain the lowest cost possible energy supply, and that its CSP remains unclear and may put certain bidders at an advantage at the expense of power suppliers that use indigenous natural gas.

But according to Meralco, its TORs already have certificates of conformity from the Department of Energy.

“None of the prospective bidders, even the generation companies that use the Malampaya gas, raised issues that can be a basis for postponement of the bidding, hence, Meralco has no valid ground to do so,” Meralco senior vice president Jose Ronald Valles said in a statement.

Fully compliant

Meralco said the Energy Regulatory Commission has even found its recent 1,200 megawatts (MW) CSP to be fully compliant with existing laws and regulations.

“Again, any generation company can submit offers for these CSP. While we prioritize power plants using indigenous fuel as required by DOE, we have to 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 explained.

Regarding Cayetano’s claim that Malampaya’s indigenous natural gas might be underutilized due to Meralco’s alleged preference for power generation companies that use imported coal, Meralco clarified that two Malampaya natural gas plants, Santa Rita and San Lorenzo, could not participate in the 1,800MW baseload CSP because they are still fully contracted with Meralco on the delivery date of the requirements.

These plants, said Meralco, have no extra capacity that can supply the 1,800MW requirements of Meralco.

Furthermore, one Malampaya gas plant, San Gabriel, joined the bidding for 1,200 MW capacity, but its offer of P8.45 per kilowatt-per-hour (kWh) was beyond the reserve price set for that CSP and was therefore non-compliant—and is 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,” Meralco said.

“No costs that were not submitted by the bidder will be allowed as pass-through charges under the PSA,” it added.