Meralco gives notice to award supply deal to 3 power firms

THE Manila Electric Co. (Meralco) on Thursday announced the issuance of a notice to award a 10-year power supply contract to three power firms whose bid offers where declared “best bids” at Monday’s auction via competitive selection process (CSP).

“The winning bidders were issued respective notices of award after having passed the post-qualification evaluation. The respective power supply agreements are still subject to approval of the Energy Regulatory Commission [ERC],” said Meralco.

Phinma Energy Corp.’s bid was for contract capacity of 200 megawatts with an all-in headline rate (VAT inclusive) of P4.7450/kWh and Computed all-in Levelized Cost of Energy or LCOE (VAT inclusive) of P4.8849/kWh.

San Miguel Energy Corp. submitted a bid for 330 MW at all-in headline rate (VAT inclusive) of P4.6314/kWh and Computed all-in LCOE (VAT inclusive) of P4.9299/kWh.

South Premiere Power Corp.’s (SPPC) bid was for 670 MW with an all-in headline rate (VAT Inclusive) of P4.6314/kWh and Computed all-in LCOE (VAT inclusive) of P4.9300/kWh.  These bids, which collectively totaled 1,200 MW in contract capacity, are much lower than the all-in headline rate (VAT inclusive) of P4.9196/kWh and Computed all-in LCOE (VAT inclusive) P5.3694/kWh reserve prices predetermined by Meralco.

They will supply Meralco starting December 26, 2019, until December 26, 2029.

Meralco has set the signing of the power supply contract on Friday morning.

Meanwhile, the bid offers of First Gen Hydro Power Corp., Phinma Energy and SPPC for a contract to supply Meralco 500 MW of mid-merit capacity for five years starting December 26, 2019, will still be subjected to post-qualification evaluation, execution of their respective power supply agreement and approval of the ERC.

The Third Party Bids and Awards Committee (TPBAC) is expected to issue the respective notices of award to them on September 12, to be followed by the signing of the PSAs with Meralco next week.

First Gen Hydro’s bid was for contract capacity of 100 MW with an all-in headline rate (VAT inclusive) of P5.1908/kWh and Computed all-in Levelized Cost of Energy (VAT inclusive) of P5.3989/kWh. Phinma Energy’s bid was for 110 MW at all-in headline rate (VAT inclusive) of P5.5858/kWh and Computed all-in LCOE (VAT inclusive) of P5.5858/kWh. SPPC’s bid was for 290 MW and had an all-in headline rate (VAT inclusive) of P5.5347/kWh and Computed all-in LCOE (VAT inclusive) of P5.7527/kWh.

The two CSPs will result in total savings of around P13.86 billion per year, or a rate reduction of P 0.41 per kWh.

No word on rebidding

Meanwhile, Meralco has yet to say if it will rebid the 20-year contract for 1,200-MW baseload capacity.

“No contract capacity was awarded due to only one bid received,” Meralco said. Atimonan One Energy Inc., a wholly-owned subsidiary of Meralco PowerGen Corp., the power generation arm of Meralco, emerged as the lone bidder at Tuesday’s auction.

Panasia Energy Inc. submitted a letter on August 28 informing the TPBAC of its withdrawal from the bidding. Mariveles Power Generation Corp., also submitted a similar letter on Tuesday morning.

First Gen Corp./First Gen Ecopower Solutions failed to arrive and submit its documents.

In all, Meralco has lined up a total of three CSPs:  A five-year contract for 500 MW, a 20-year contract for 1,200-MW greenfield, with commercial operations date in 2024, and a 10-year contract for 1,200-MW brownfield, with COD in December 2019.  Greenfield power plants are those that are built from scratch while brownfield plants are those that are already existing.

Image Credits: Nonie Reyes