DoE to Meralco: Put PSAs under bidding

By Jordeene B. Lagare – May 29, 2019
from The Manila Times

BATANGAS CITY, Batangas: ENERGY Secretary Alfonso Cusi on Tuesday urged the Manila Electric Co. (Meralco) to subject its power-supply agreements (PSA) to competitive bidding after the country’s highest court recently ordered it.

“(With) Meralco, they have to do it fast. Don’t waste time. Do it now,” Cusi said on the sidelines of Lopez-led First Gen Corp.’s groundbreaking of its liquefied natural gas (LNG) terminal here.

“The decision of the Supreme Court is very clear. We just have to follow it to the letter,” he added, referring the high tribunal’s May 3 ruling that power deals signed on or after June 30, 2015 must undergo the competitive selection process (CSP) for purchasing electricity by distribution utilities (DUs).

It invalidated the resolutions issued by the Energy Regulatory Commission (ERC) postponing the CSP requirement in October 2015 and March 2016, respectively — which the high court regarded as grave abuse of discretion amounting to lack or excess of jurisdiction.

Meralco has PSAs with seven generation companies covering more than 3,500 megawatts (MW) of supply. These are Mariveles Power Generation Corp., Central Luzon Premiere Power Corp.,
Redondo Peninsula Energy Inc., Atimonan One Energy Inc., St. Raphael Power Generation Corp., Panay Energy Development Corp. and Global Luzon Energy Development Corp.
Cusi’s remarks echoed those he made in a statement last Friday to uphold the Supreme Court verdict.

“We call for the exigent conduct of CSP for the PSAs of DUs, which include electric cooperatives and private corporations like Meralco,” he said then.

Also on Tuesday, Meralco said it would subject its agreement with Atimonan One Energy to competitive bidding to comply with the high tribunal’s order, but added that it could delay the construction of a 1,200-MW coal-fired power plant in Atimonan town, Quezon province.

During a briefing on the sidelines of the power giant’s annual stockholders’ meeting, Meralco President and Chief Executive Officer Ray Espinosa said it was doing so in order to avoid delaying the facility’s construction.

“Obviously, if we want to pursue Atimonan, we have to go through CSP. Once things become clearer [regarding] the CSP, then we would obviously act as fast as we can,” Espinosa said.

He emphasized, however, that the ruling “could delay the construction of the much-needed power plant.” Nevertheless, he said Meralco respected it and would follow it.

“We’ll follow the competitive selection process and we would build as quickly as we can in coordination with, and [with] the approval of, the DoE,” Espinosa said.