DOE, Meralco lauded for transparent bidding of contracts

MANILA, Philippines — Party-list group Agham yesterday commended the Department of Energy (DOE) and the Manila Electric Co. (Meralco) for the recent successful competitive selection process (CSP) or bidding for long-term contracts for the supply of 1,500 megawatts (MW) of electricity.

“We laud the DOE, led by Secretary Alfonso Cusi, for issuing the 2018 circular on CSP, which was upheld by the Supreme Court (SC). We thank Secretary Cusi for immediately implementing the SC decision and for closely overseeing the Meralco bidding process. Ultimately, we believe the CSP will result in lower electricity rates,” Agham president Angelo Palmones said.

He said Meralco should similarly be credited with “conducting a fair and transparent bidding in accordance with the DOE circular, and obtaining lower generation charges from its suppliers.”

He said Meralco is expected to pass on the lower generation charges to its customers in terms of lower rates.

On Sept. 9, Meralco announced that PHINMA Energy Corp., San Miguel Energy Corp. and South Premiere Power Corp. submitted the best bids for its 1,200 MW contract good for 10 years.

Two days later, the distributor informed the public that the best offers for its 500-MW, five-year supply came from First Gen Hydro Power, Phinma Energy and South Premiere.

“It was very encouraging to see Meralco ensure that the bids were lower than current generation charges. The bidding process created a very price competitive atmosphere that resonated across all bidders,” Palmones said.

He said the resulting prices from the new round of CSP “are significantly lower than the average generation cost today of around P5.88 per kilowatt-hour (kwh), which includes the value added tax.”

Based on the results of the first CSP, he said customers would enjoy a rate reduction of 41 centavos per kwh, or a total of almost P14 billion for all electricity users in one year.

“From a consumer group perspective, we are confident that these new contracts will ultimately lead to the much-needed additional power supply to address the growing demand. Moreover, this is a big step in lowering the cost of electricity in the country,” he stressed.

He said his group expects future Meralco CSPs “to result in even lower generation charges to the great benefit of its customers.”

“We also hope that this transparent CSP is undertaken by other distribution utilities and electric cooperatives, which were also directed by the Supreme Court to conduct their own competitive bidding processes,” he added.