WIN WIN SOLUTION FOR MERALCO’s 3,551MW MIDNIGHT CSP CIRCUMVENTION
David Celestra Tan, MSK
11 March 2018
Things are eerily quiet on Meralco’s Midnight power supply contracts and one wonders whether we will be surprised one day soon that the seven (7) midnight contracts totaling 3,551mw of coal projects have been approved by the government and rammed through the throats of the 25 million Meralco consumers.
Another scenario is the power crisis gambit is in play that had worked many times before for the special interest groups in forcing the approval of coveted power projects and prices. There will be a strategic quiet and letting the country teeter into power shortages. Interrupt power and punish the captive market of residential and commercial establishments and make them beg for “electricity at any cost, damn with the rules and legalities”.
This can happen and will happen because most of the power generating plants in the country are controlled by the same groups that allied with Meralco in the caper of April 26, 2016. Let us remember that these are the same groups who were found engaging in power market manipulations in November and December 2013 and supposedly meted hundreds of millions in fines. Except the final report has been frozen in the ERC.
I think the energy family led by the DOE should work for a win-win solution and not wait until there is already a power crisis. We vehemently object to the circumvention of the CSP policy but we also vehemently object to allowing a power shortage. Both ways the consumers get screwed. We cannot allow power development of the country to be stymied by these Meralco transgressions.
And there are many pro-active options.
- The DOE can push for CSP biddings now for the desired capacity additions by 2021. This can be in the range of 1,000 to 1,500mw total. LNG and Coal. Meralco and the other DU’s can be the committed off-takers assuming they are sincere in bringing least cost power to the consumers.
These biddings will probably settle once and for all the debate on what is good for the consumers, an “aggressive negotiation” of Meralco with its sister company Meralco PowerGen or the true competitive bidding administered by a third party”?
These true biddings can also test in the market a more consumer friendly Power Supply Contract template that mitigates sweetheart provisions on fuel allowances, downtime allowances, and minimum off-take guarantees. We now have to distinguish the contract terms for BOO and BOT. Pay only for delivered service and no payment for downtimes.
Most importantly this bidding will usher in for the country the long needed era of truly competitive biddings for power supply and the opening of the generation sector to all deserving and “good for the consumers and environment” generators.
- The DOE can also initiate a win-win solution for Meralco’s 3,551mw of midnight contracts. Perhaps a fair formula can be worked out so that about half of the 3,551mw capacity (1,750mw) can be moved forward in a way that is fair for the consumers and the others are dropped and the proponents just participate in biddings. Also only 50% of this 1,750mw can be controlled by MeralcoPowerGen.
How about holding a run-off auction administered by a proven 3rd Party among the seven (7) contracts where they submit a more competitive bid with commercial operation of 2020 to 2022. The lowest 1,750mw get to move forward.
This is a one time compromise solution and must be considered as an exception and not the rule or precedent.
It is eerie when the Department of Energy that has the mandate to assure sufficient power supply for the future, is quiet about the subject. Let us hope the consumers and country are not hit by a power crisis hysteria again in a few months, perhaps as early as April and May when it is hot and the power needs of the country soars to the highest peak.
Is a Meralco “all or nothing” gambit in play? Will the consumers again be threatened and tortured with power shortages and be made to swallow Meralco’s 20 year sweetheart deals?
Why are we not seeing some affirmative action now? It is not too late for a win-win solution.
MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com
