Meralco reiterates that the conduct of the Competitive Selection Process (CSP) for its supply requirements is in accordance with existing rules of Department of Energy (DOE) and Energy Regulatory Commission (ERC), and complies with the mandate under the EPIRA to secure the least-cost supply in an open and transparent manner.
“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 and Head of Regulatory Management Jose Ronald V. Valles said.
On the previous CSPs that were being questioned, Meralco emphasized that the Terms of Reference (TORs) have certificates of conformity from the DOE. In fact, the ERC found the recent 1200MW CSP of Meralco to be fully compliant with existing laws and regulations, which is the reason why the ERC gave a Provisional Authority to implement the resulting Power Supply Agreement (PSA). This particular CSP was participated in by First NatGas’ San Gabriel plant, which submitted a very high price resulting in it becoming non-compliant.
“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 reiterated.
Meralco also clarified that Santa Rita and San Lorenzo plants, which use Malampaya natural gas, could not join the earlier 1800MW baseload CSP because they are still fully contracted with Meralco on the delivery date of the requirements. These plants have no extra capacity that can supply the 1800MW requirements of Meralco.
While San Gabriel, another plant that uses Malampaya gas joined the bidding for 1,200 MW capacity, its offer of P8.45 per kWh is still beyond the reserve price set for that CSP and was therefore non-compliant. The offer was just significantly higher than the winning bid of about ₱7 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. No costs that were not submitted by the bidder will be allowed as pass-through charges under the PSAs.