Meralco announced on September 9, 2019 the successful bidding for the contract capacity of 1,200 MW (NET), to supply Meralco effective December 26, 2019 for a term of 10 years. This was done in accordance with the Department of Energy (DOE) Circular requiring Distribution Utilities to procure power through Competitive Selection Process (CSP). The CSP was administered by the Third Party Bids and Awards Committee (TPBAC) that was constituted pursuant to the DOE Circular.
The distribution utility informed the public that, after the opening and evaluation of the Bids held that day, the TPBAC declared the Bids submitted by PHINMA Energy Corporation, San Miguel Energy Corporation, and South Premiere Power Corporation to be the Best Bids. The TPBAC made the findings based on a non-discretionary “Pass/Fail” assessment for completeness after they determined that there was no failure of bidding.
Pursuant to the Instructions to Prospective Bidders (IPB), the Best Bids will now undergo Post-Qualification. The Third Party Bids and Awards Committee is expected to issue the respective Notices of Award in favor of those who satisfactorily passed Post-Qualification, today, September 10, 2019, to be followed by the signing of the Power Supply Agreements with Meralco within the week.
PHINMA Energy Corporation’s bid was for contract capacity of 200 MW with an all-in headline rate (VAT inclusive) of 4.7450 PhP/kWh and Computed all-in LCOE (VAT Inclusive) of 4.8849 PhP/kWh. San Miguel Energy Corporation’s bid was for 330 MW at all-in headline rate (VAT inclusive) of 4.6314 PhP/kWh and Computed all-in LCOE (VAT Inclusive) of 4.9299 PhP/kWh. South Premiere Power Corporation’s bid was for 670 MW and had an all-in headline rate (VAT Inclusive) of 4.6314 PhP/kWh and Computed all-in LCOE (VAT inclusive) of 4.9300 PhP/kWh. These bids collectively totalled 1,200 MW in contract capacity. These bids are much lower than the all-in headline rate (VAT-inclusive) of 4.9196 PhP/kWh and computed all-in LCOE (VAT-inclusive) 5.3694 PhP/kWh reserve prices pre-determined by Meralco based on recently ERC-approved contracts and disclosed only upon opening of bids.
Meralco declared that the successful CSP will ultimately result in least cost to consumers. Meralco clarified that the all-in rate already includes line rental and VAT, and the cost of replacement power for all plant outages. The generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers.
According to Meralco, the resulting prices from the CSP are significantly lower than their average generation cost today of around PhP 5.88 per kWh (VAT inclusive). Once implemented starting December 26, 2019, Meralco consumers are expected to save around PhP 0.28 per kwh or 9.46 Billion PhP annually for 10 years from the new Power Supply Agreements to be executed with the winning power suppliers.
The bidding for the 1,200MW was witnessed by representatives from the DOE and was attended by several generation companies. According the Phinma Energy President Eric Francia, “I just want to express our appreciation to the TPBAC and TWG for a well run process. It was a good experience and hopefully we will have more pro-consumer bids moving forward.”
The Meralco TPBAC is chaired by Atty Ferdinand Domingo, who was selected as representative of consumers, together with Atty Adrian Cristobal, another consumer representative, who was a former Secretary of the Department of Trade and Industry. The process for the selection of the consumer representatives was approved by the DOE. (Meralco PR)