Meralco seeks price challengers for Citicore power supply offer

MANILA, Philippines - Power distributor giant Manila Electric Co. (Meralco), in compliance with the competitive selection process (CSP) policy, is seeking price challengers for long-term power supply offered by Citicore Power Inc. from its solar power plants.

Citicore has offered to supply Meralco with 75 to 85 megawatts (MW) of capacity for a period of 20 years.

These will come from the 60-MW solar power plant in Toledo City, Cebu under First Toledo Solar Energy Corp. (FTSEC), the 18-MW solar farm in Mariveles under Next Generation Power Technology Corp. (NGPTC), and the 25-MW solar power plant in Silay City, Negros Occidental under Silay Solar Power Inc.

Citicore has offered a rate of P3.50 per kilowatt-hour (kWh) for the contracted capacities with a 1.5 percent annual escalation from the second to the 10th contracted years, and one percent  increase annually for the remaining contract period.

“Based on our assessment of current policy directions and industry competition, we think that it was the best option,” Citicore executive vice president for commercial and development operations Manolo Candelaria said.

Meralco has given price challengers until 4 p.m. of Aug. 14 to submit their financial proposals with bid security in the form of an irrevocable letter of credit amounting to P5 million.

One price challenger is PetroEnergy Resources Corp. (PERC) of the Yuchengco group.

 “We made a proposal to Meralco when it came out with an announcement, asking potential swiss challenge to Citicore, which offered P3.50 per kWh,” PERC vice president Francisco Delfin Jr. said.

In its offer, PERC will source the capacity from the 49-MW Tarlac-2 solar-power project. It is the expansion of the existing 50-MW solar power plant in the 55-hectare industrial land within the Central Technopark in Tarlac City.

Meralco has previously held a competitive bidding for offers made by Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar Inc. for 50 MW each.

Both solar developers have offered a price of P5.39 per kWh for a period of 20 years, lower than the latest solar FIT rate of P8.69 per kWh.

Solar Philippines will supply 25 MW from its solar farms in Tanauan, Batangas and Naic, Cavite, which are targeted for completion in February and April 2017, respectively.

Meanwhile, PowerSource is currently developing a 50-MW solar farm in the municipality of San Miguel, Bulacan which is scheduled for completion in August 2018.

Meralco received one price challenge for the offer made by PowerSource. 7 Balboa of Soleq, the solar power arm of Singapore-based Equis Funds Group Pte. Ltd., offered a price of P4.69 per kWh.

Meanwhile, no offer was made against that of Solar Philippines.

Both supply contracts have yet to be approved by the Energy Regulatory Commission.