Two San Miguel firms submitted the lowest deals for 1.800 Megawatts (MW) energy in the next two decades beginning in 2024 for the open selection of the (CSP) process held by Manila Electric Co. (Meralco).
As the Power for Citizens Alliance, a network of civil society groups, the Supreme Court has ordered the CSP delivery department to impose a provisional restraining order.
In a Friday press release, Meralco reported that Excellent Energy Resources (EERI) and Masinloc Power Partners Co. were rendering the two “highest” tenders. Ltd (MPPCL), both providing low energy costs (LCOE). Both businesses are SMC Global Power Holdings Corp. subsidiaries.
“EERI had a P4.1462 LCOE per kilowatt-hour (kWh) and Masinloc Power Partners Co., levied energy costs. P4.2605 per kWh was given to Ltd (MPPCL). Both are considerably lower than P5,2559 per kWh in the LCOE reserves,” Meralco said, citing the Third-Party Offers and Awards Committee’s decision (TPBAC).
EERI suggested supplying the former natural gas power station to Meralco with 1.200 MW while the MPPCL proposed supplying the distributor 600MW from its coal-fired power station to the distributor.
The TPBAC has described the deals of the three other companies as the “possible better offers.” The business comprises the Mariveles Power Production Organization and GNPower Dinginin Ltd. Atimonan One Energy Inc. (A1E) Co. (GNPD), getting P4,3321, P4,6338/kWh, and P5,2500/kWh, respectively. P4,338/kWh.
The LCOE threshold was not respected by St Raphael Power Generation Company which also submitted a bid as it provided P5.4426 per kWh.
Meralco, Vice President and Director of the Service Economics Department Lawrence S. Fernandez reported that the LCOE is used to evaluate energy supply from multiple industries over 20 years.
“Typically, generation charges differ with time, owing to variables such as fuel price increases, exchange rate, inflation, etc. Over a term of 20 years, the rates for a power supply contract would also shift,” Mr.Fernandez said in an SMS on Freitag to BusinessWorld.
“The auction price of any bidder for 20 years is translated into a single or “levelized” comparable bidder for a 20-year period to make it easy to evaluate supply deals.”
In a quote, Ferdinand A. Domingo, Chair of the TPBAC said the Committee conducted CSP under all laws laid down by the Energy Department (DoE).
‘In seven days from now the above-mentioned bidders will be post-qualified with the best bids (today). Thus, in the interests of those who have successfully passed their post-qualification, TPBAC shall give respective award notifications.
Following a prequalification appraisal process, the committee voted to select the 2 bidders with the better bids.
Previously the deadline for sending offers was Jan. 27, Meralco, Mr Fernandez said.
Last month, he stated in a mobile message that there are 9 companies that have sent their documents in due course.
“There was a combined power of 5,850MW provided. This is more than three times as high as 1,800 MW” on January 28, Mr Fernandez told BusinessWorld.
PETITION FOR THE TRO
A appeal to the Supreme Court to grant a provisional restraining order in the face of the 1,800-MW CSP from Meralco was lodged on Friday by the People for Power Coalition (P4P) network of civil societies.
In its petition copy, the P4P Coalition claimed that “the Meralco 1.800 MW tender conditions are rather unfavorable to Meralco’s power users because they did not follow the 2018 CSP DoE Regulations and will not result in the least energy costs.”
“In 2019, Meralco issued two tenders that it refers to as ‘prudent energy sources’ and ‘pro-consumer’ references, (such as) clear energy rates without an automatic fuel pass and 100% assured supply from all electricity plants nominated,” said the P 4P Coalition in its petition.
“In 2020 Meralco issued an additional tender to 1,800 MW contracts, this time, with fuel costs immediately being transferred to its electricity consumers, which cause electricity prices to vary as high as 3 2,4475 PhP/kWh (per kilowatt-hour), electricity power stations to be shut off at the expense of the electricity consumers.”
Meanwhile, in the Meralco press release, TPBAC President Mr Domingo was quoted as saying that the on-going 1.800-MW CSP “provide Meralco’s customers with a sufficient and stable electricity supply at reasonable rates for the next few years.”