Meralco eases rules for 2nd round of CSP bidding

MANILA, Philippines — Manila Electric Co. (Meralco) has relaxed its rules on the second round of the  competitive selection process (CSP) for 1,200-megawatt (MW) greenfield capacity required by 2024.

Under the terms of reference published, power players can offer contract capacity at 600 MW blocks, and can bid using multiple units with a minimum capacity of 150 MW per unit and the same fuel type.

Bidders can offer fuel source “from a technology that complies with the prevailing emission standards under pertinent (Department of Environment and Natural Resources) DENR issuances on emission and other environmental standards for power plants.”

For the contract, there will be no outage allowance provided.

This means if the power supplier fails to make available the contracted capacity, it will be fined equivalent to P908 per affected megawatt-hour (MWh) nomination by Meralco, which shall be used to reduce the generation charge to the consumers.

If the power supplier fails to meet the commercial operation date (COD), the power supplier should procure replacement

power to be paid for by Meralco at the lower between the wholesale electricity spot market (WESM) price and the contract price.

Meralco is seeking bids for 1,200 MW with supply for 20 years starting September 2024.

However, the power distributor has the option to take available energy up to 1,200 MW (net) “at commissioning energy charge” starting September 2023.

Meralco said supply should come from a baseload (firm and dispatchable) power plant.

Meralco reserves the right to reduce the contract capacity “equivalent to the reduction in the demand of captive customers in order to avoid stranded contract capacity or by reason of the implementation of Retail Competition and Open Access, the Renewable Energy Law, or other Laws and Legal Requirements.”

Interested parties are required to submit an expression of interest and confidentiality undertaking until Jan. 13, 2020 to participate in the CSP.

The TPBAC has set a pre-bid conference on Jan. 20 and the bid submission deadline on Feb. 17.

Last September, Meralco conducted the CSP for the 1,200-MW greenfield capacity.  It was declared a failed bidding after only Atimonan One Energy Inc., a unit of Meralco Powergen Corp. (MGen), submitted its offer.

After the failed bidding, the Department of Energy (DOE) directed Meralco to open the second round of its CSP to all power plants—whether old or new—to truly allow competition and get the least cost of power for consumers.