SMC plants offer best bids for Meralco supply

MANILA, Philippines — San Miguel Corp. (SMC) offered the best bids in the 1,800-megawatt (MW) competitive selection process (CSP) of Manila Electric Co. (Meralco).

Out of the six qualified offers received yesterday, the third-party bids and awards committee (TPBAC) for Meralco’s CSP said the two best bids are from Excellent Energy Resources Inc. (EERI) and Masinloc Power Partners Co. Ltd. (MPPCL).

EERI, a unit of SMC Global Power Holdings Inc.,  offered to supply Meralco 1,200 MW from a natural gas-fired power plant at a levelized cost of electricity (LCOE) of P4.1462 per kilowatt hour (kWh).

Meanwhile, MPPCL’s offer is 600 MW from a coal-fired power plant at P4.2605 per kWh.

Both offers are significantly below the LCOE reserve price of P5.2559 per kWh.

“Pursuant to Section 5 of the Instructions to Prospective Bidders, the aforesaid bidders with the best bids will now undergo post-qualification within seven days from date hereof. Thereafter, the TPBAC shall issue respective notices of award in favor of those who satisfactorily passed post-qualification,” the five-man committee said in the notification of best bids released yesterday.

EERI is putting up the 1,200-MW Ilijan natural gas fired plant project in Batangas.

Located in Zambales, MPPCL was acquired by SMC Global Power from Thai power firm Electricity Generating Public Co. Ltd. (EGCO) and American energy giant AES Corp. in 2018.

The offers made by Mariveles Power Generation Corp. (MPGC), Atimonan One Energy Inc. (A1E), and GNPower Dinginin Ltd. Co. (GNPD) were qualified as “possible next best bids” with LCOEs of P4.3321 per kWh, P4.6338 per kWh, and P5.2500 per kWh, respectively.

On the other hand, St. Raphael Power Generation Corp.’s (SRPGC) LCOE of P5.4426 per kWh failed to meet the reserve price.

“The TPBAC managed the CSP in full compliance with all rules and regulations issued by the DOE. The Terms of Reference (TOR) were reviewed and approved by the DOE, and all contracts that will result from the bidding process will be subjected to regulatory proceedings and evaluation by the ERC,” TPBAC chairman Ferdinand Domingo said.

The two bidders with the best bids submitted the lowest cost offers, after having been pre-qualified through a detailed evaluation of their document submissions.

The TPBAC was assisted in its evaluation by experts from Leidos, a global engineering firm that provides independent engineering advisory service to clients in various energy markets around the world.

Coming from 2019’s first successful CSP, Meralco had announced that resulting prices from the previous CSP have proven to be significantly lower than the average generation cost in previous years.

Consumers were said to enjoy total savings of around PhP13.86 billion per year moving forward, or a rate reduction of P0.41 per kWh.

“We will continue to work with the energy industry, government and other stakeholders to serve the country’s energy needs. As evidenced in the past, a successful CSP and the resulting PSA signings will result in additional savings and, ultimately, least cost to consumers,” TPBAC secretariat and Meralco VP and head of Utility Economics Department (UED) Lawrence Fernandez.