over power supply bidding process
BAYAN Muna chairman Neri Colmenares said he expects a wholly owned subsidiary of Manila Electric Company (Meralco) to win a big power supply contract from its parent firm, and expressed apprehension the subsidiary’s win may not benefit consumers.
Meralco is scheduled to bid out this week 1,800 megawatts in power supply contracts under the government’s competitive selection process (CSP). But Colmenares said the CSP rules might favor selected bidders including subsidiaries of Meralco such as Atimonan One Energy Inc. (Atimonan One), which is building a new 1,200-megawatt coal-fired power plant in Atimonan, Quezon.
According to the Bayan Muna chairman, “new power plants have to recover a lot of expenses, including capital recovery fees, which jack up their asking prices for the electricity they will generate and sell. In contrast, existing power plants have recovered substantial, if not all, of their capital. That’s why they can offer lower rates during bidding.”
“Meralco may shout to high heavens that the upcoming bidding for electricity it needs for 20 years starting 2024 has attracted a dozen power generation companies. But their leaves the most competitive bidders out,” he added.
“Meralco’s upcoming power supply auction has added another 600 MW that Meralco will willingly share with other suppliers. This is perceived as balato to bidders whose presence and cooperation will help counter allegations of self-dealing. If Meralco insists on this bidding process, it runs the risk of violating its franchise, which clearly requires the distribution utility (DU) to get electricity in the least cost manner,” he added.