June 15, 2019
The Manila Electric Co. (Meralco) assured the Department of Energy (DoE) it will accelerate the conduct of public bidding in its power deals.
In a statement on Friday, Energy Secretary Alfonso Cusi said the DoE and Meralco agreed to expedite the competitive selection process (CSP) for its power supply agreements (PSAs) to ensure continued supply in Luzon.
On Thursday, both parties met and recognized that the conduct of CSP is certified as urgent, given the need to ensure a reliable and steady supply of energy to everyone.
“We are reiterating our initial statement on this matter that we must do it fast, and there must be no delays in the implementation of CSP for Meralco and for other distribution utilities and electric cooperatives. We must act fast because demand continues to grow and we want to be ready to supply the needs of a growing market to ensure that the country will maximize its growth potential,” Cusi said.
“We want to ensure accountability from power providers that supply is available and that they are ready for any eventuality, which is their responsibility as a player in a commodities sector,” he added.
Cusi initiated a meeting with the country’s largest power distributor after the Supreme Court (SC) ruled last month that all PSA applications submitted to the Energy Regulatory Commission (ERC) on or after June 30, 2015 must undergo CSP.
CSP is designed to protect consumers, and rules under them require DUs to get at least two offers for power supply before awarding a deal, ensuring that consumers get the least cost.
Since the high tribunal’s decision, the DoE has repeatedly called on Meralco and other distribution utilities to fast-track the competitive bidding of its supply agreements and ensured the compliance of industry players with the SC decision.
Meralco had said it would adhere to the high tribunal’s order. Meralco President and Chief Executive Officer Ray Espinosa said it would subject its agreement with Atimonan One Energy Inc. to competitive bidding.
However, Espinosa said it could delay the construction of a 1,200-megawatt (MW) coal-fired power plant in Atimonan town, Quezon province. “Obviously, if we want to pursue Atimonan, we have to go through CSP. Once things become clearer [regarding] the CSP, then we would obviously act as fast as we can,” Espinosa said.
“We’ll follow the competitive selection process and we would build as quickly as we can in coordination with, and [with] the approval of the DoE,” he added.
Meralco has PSAs with seven generation companies covering more than 3,500 MW of supply. These are Mariveles Power Generation Corp., Central Luzon Premiere Power Corp., Redondo Peninsula Energy Inc., Atimonan One Energy, St. Raphael Power Generation Corp., Panay Energy Development Corp. and Global Luzon Energy Development Corp.
The ERC previously said that based on initial estimates, about 95 contracts, including the seven Meralco PSAs with affiliates, were affected by the high court’s resolution.
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