Just days before the scheduled public bidding for the 1,000-MW of power supply requirements of distribution utility Meralco, the Taguig Regional Trial issued a temporary restraining order (TRO), effectively halting the proceeding. Subsequently, a 20-day extension was issued. This move is expected to create a negative domino effect on the already vulnerable energy industry in the country and will directly impact the reliability of service to millions of electricity consumers.
The TRO stemmed from a petition filed by members of the Malampaya consortium- Prime Energy, UC 38 LLC, Prime Oil and Gas Inc., and Philippine National Oil Co.-Exploration Corp. (PNOC-EC) to halt the bidding or Competitive Selection Process (CSP). The petitioners argued that the terms of reference apparently do not give preference to indigenous natural gas that is being produced by the Malampaya gas field.
Meralco debunked this claim, clarifying that the power plants using Malampaya gas have actually expressed interest in participating in the bidding. Eight generation companies, including Malampaya-powered First Gas Power Corp. and First NatGas Power Corp., have shown interest in joining the bidding process.
But with the issuance of the TRO, the procurement of 600MW and 400MW of much needed power supply for the country will be delayed. This is detrimental, not just for Filipino households who rely on electricity for day-to-day convenience, but much more so for businesses and industries that require stable, continuous and reliable power service. This delay poses as a roadblock to the government’s push for energy security.
Worse, this type of setback in the power bidding process actually has a consequential impact on electricity prices, affecting the pockets of ordinary consumers.
Energy security is threatened when delays occur in securing agreements or contracts between power suppliers and distributors. In Meralco’s case, the postponement of the bidding will compel the utility to source the necessary supply from the spot market, exposing consumers to highly volatile prices. As a result, end-users are forced to pay more for electricity that could have been procured more cost-efficiently if the bidding had proceeded as scheduled.
This scenario defeats the very purpose of CSP wherein the winning bidder is determined based on price offers. It also contradicts the mandate of distribution utilities like Meralco to supply sufficient, continuous, and reliable electricity at the least cost.
President Ferdinand Marcos, Jr.’s administration prioritizes energy security in his economic agenda, but this delay directly opposes this, putting the country in peril while we continue to grapple with our already dire power supply situation.
Clearly, consumers are the ones will suffer the implications.
Questioning the rules or the bidding process likewise proves to be futile given that the CSPs are conducted in a highly transparent manner.
These biddings observe strict processes and adhere to stringent rules set by the Department of Energy (DOE) and Energy Regulatory Commission (ERC)—agencies tasked to ensure the transparency and integrity of these biddings.
According to Meralco, the DOE issued a Certificate of Conformity to proceed with the scheduled CSP, proving that the terms of the biddings comply with applicable government rules and regulations. Neither the DOE nor ERC has flagged any irregularities related to the CSP.
Challenging the integrity of these biddings is highly insulting to the government, particularly the DOE and ERC, given the extensive research and hours dedicated to crafting the strict rules governing the CSPs. Likewise, it should be noted that after a winning bid is declared, the ERC conducts a stringent assessment to ensure that these contracts adhere to the highest standards and regulations set by the government.
At this point, it is vital to reconsider whether halting the implementation of the bidding is truly in the best interest of the government and consumers, or if it is being influenced by business interests.
We must stay focused on providing Filipino consumers with the most affordable power supply possible, which will support communities and enable economic growth.
This approach is undoubtedly in the best interest of the consumers and the country.
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