Meralco’s revised CSP rules spark interest of top firms
By Lenie Lectura -January 6, 2020
from Business Mirror
The Manila Electric Co.’s (Meralco) revised bidding rules for the second round of the competitive selection process (CSP) for 1,200-megawatt (MW) capacity sparked the interest of conglomerate San Miguel Corp. (SMC) and Ayala Corp.
SMC President Ramon Ang affirmed over the weekend the company’s strong interest for the upcoming CSP scheduled next month.
“Yes, we will bid,” said Ang 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 terms of reference (TOR) meant for greenfield power requirement were stringent.
To ensure a successful rebidding, Meralco relaxed the rules. Among others, the utility firm now allows 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 Holding Corp. and Meralco PowerGen Corp. (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.
“We did not join the greenfield because CFB plants do not meet the requirements. If they will let us join, that is a level playing field,” Ang had said.
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.
Based on the revised TOR, bidders can offer Meralco to supply 600 MW blocks. If multiple power facilities would be utilized to supply Meralco, bidders are allowed to place a minimum bid capacity of 150 MW per unit of the same fuel type. Previously, the TOR stated that the entire 1,200-MW capacity must come from one power plant.
The new bid invite was published December 27.
A pre-bid conference is scheduled on January 20, while the bid submission and opening is on February 17. The power-supply contract is good for 20 years, commencing September 2024.
It can be recalled that the first CSP for the 1,200-MW capacity was declared a failure after only Atimonan One Energy Inc. of MGen 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.
Energy Secretary Alfonso G. Cusi declined to comment on the revised TOR, saying “I have yet to see it first.”
Clean energy advocates said they would vigilantly watch over the upcoming CSP. They warned Meralco that consumers would be on guard to uphold the goal of the CSP in securing affordable electricity from the power firms that will sell their capacity to the country’s largest power distribution firm.
