MANILA Electric Co. (Meralco) said Sunday that it was pursuing a policy of keeping power costs as low as possible amid concerns over its power supply agreements (PSAs).
The distribution utility (DU) said that its “lowest bid mandate” ensures that customers’ electricity bills would not be as high compared to other DUs in the country.
“The competitive selection process or CSP is a government-mandated bidding to ensure that only power suppliers that offer the least cost supply will be contracted by a DU to protect consumers against high power rates,” Meralco Vice President Joe Zaldarriaga said.
He explained that the CSP, as approved by the Department of Energy (DoE) and Energy Regulatory Commission (ERC), is an open and transparent bidding process where electricity consumers and other interest parties are allowed to observe. The proceedings are also streamed live on online platforms.
“We would like to emphasize that Meralco strictly follows the requirements of CSP [as] prescribed by the government, which includes securing prior approval from [the] DoE of our power supply procurement plan and the corresponding terms of reference for every CSP,” Zaldarriaga said.
“In the case of our 1,800 megawatts (MW) and 1,200 MW CSPs, the terms of reference also considered suggestions of the ERC chairperson before they were published,” he added.
Meralco said the terms of reference ensure a level playing field for all generation companies participating in the bidding because the rules apply to all bidders. The bidders are also required to include all costs in their offers for purposes of determining the lowest and winning bid.
No hidden costs are allowed to be charged to consumers under Meralco CSPs, the firm said, adding that since the terms require prior DoE approval, tailor fitting to favor a particular generation company is prohibited.
“Any generation company can submit offers for these CSP. While we prioritize power plants using indigenous fuel as required by the DoE, we ensure that it will not violate our least cost mandate under the law,” Zaldarriaga said.
“There is no preferential treatment and Meralco always awards the contracts to the lowest compliant bidder.”
Under the recently-completed CSP for a 1,200-MW baseload requirement, Meralco named South Premiere Power Corp. the winner after it submitted the lowest offer of P7.0718 per kilowatt hour (kWh).
This bested the P7.1006 per kWh bid submitted by the joint venture of Limay Power Inc. and San Roque Hydropower Inc. and First Natgas Power Corp.’s bid of P8.4489 per kWh.
First Natgas, which uses indigenous Malampaya gas for its San Gabriel power plant, was deemed non-compliant as the offer went beyond the reserve price set for the bidding.
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