Meralco again modifies terms for second CSP

The Manila Electric Co. (Meralco) is again tweaking the terms of reference (TOR) for the second round of the competitive selection process (CSP) involving 1,200 megawatts (MW) of new capacity.

“The invitation to bid and terms of reference for the second round will be updated. Hence, they will need to be republished,” said Meralco Utility Economics Head Lawrence Fernandez in an interview.

However, Fernandez did not say why there is a need to amend the bid invite and TOR as these were recently updated late December.

Meralco is seeking bids via competitive bidding for its 1,200-MW capacity requirement by 2024.

The first CSP was declared a failure after only Atimonan One Energy Inc. of Meralco PowerGen Corp. submitted a bid. MGen is the power generation arm of Meralco.

Thereafter, the Department of Energy (DOE) told Meralco to revise the TOR so more power firms can participate.

Meralco relaxed some of the bid rules in order to accommodate more participants.

Last December 27, Meralco published a new bid invite. Based on this, Meralco has scheduled a pre-bid conference on January 20, 2020, while the bid submission and opening is on February 17, 2020. The power-supply contract is good for 20 years, commencing September 2024.

The updating of the bid invite and the TOR will affect the bidding schedule, said Fernandez.

“The updating is still ongoing, and will require the necessary technical and legal review. There’s no firm timetable yet, but the milestone dates, such as pre-bid conference, will be adjusted to consider the republication date,” added Fernandez.

Over the weekend, conglomerate San Miguel Corp. (SMC) expressed keen interest to participate in the CSP, while Ayala Corp. said it is reviewing the amended bid rules.

“Yes, we will bid,”  SMC President Ramon Ang replied in a text message when asked if the power unit of SMC will participate in the competitive bidding.

Ang has been telling Meralco to allow other power plants to join the bidding because the original bid rules meant for greenfield power requirement were stringent.

Meralco heeded this. The December bid invite states that it would allow a fuel source “from a technology that complies with the prevailing emission standards under pertinent DENR [Department of Environment and Natural Resources] issuances on emission and other environmental standards for power plants.”

Previously, Meralco’s TOR allow power plants utilizing high-efficiency, low-emission technology.

Mariveles Power Generation Corp., which is a joint venture between SMC Global Power Holdings Corp. and MGen, withdrew from the first CSP because the power plant that would join the auction is a circulating fluidized bed (CFB) coal-fired power plant.

Another power giant that is expected to join the second round of CSP is AC Energy.

“We are reviewing it,” said AC Energy President Eric Francia in a text message, while adding that the new set of TOR has made it attractive to power firms. “There have been significant improvements in the TOR. Other remaining concerns, hopefully, could be addressed through the process. I hope this CSP succeeds as we need additional capacity soon.”

AC Energy and SMC previously won in two other competitive biddings for Meralco’s 1,200-MW brownfield and 500-MW capacity requirement.

Image Credits: Nonie Reyes