Duterte admin, Meralco lauded for ensuring stable power supply

September 15, 2019

A FORMER congressman and his group have lauded the Duterte administration and the Manila Electric Company (Meralco) for the recent successful competitive selection process or bidding for the 1,500 megawatts (MW) and another 500 MWs supply of electricity.

Former Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya para sa Mamamayan (Agham) party-list Rep. Angelo Palmones said the Duterte administration through the Department of Energy (DoE) in partnership with Meralco has been doing good to ensure a stable power supply.

“We strongly support and praise the DoE, led by Secretary Alfonso Cusi, for issuing the 2018 DOE Circular on Competitive Selection Process (CSP), which was upheld by the Supreme Court. We thank Secretary Cusi for immediately implementing the Supreme Court decision, and for closely overseeing the Meralco bidding/competitive selection process. Ultimately, we believe that the CSP process will cut down the generation charge of electricity rates,” said Palmones who returned to his first love as broadcaster of dzRH.

AGHAM also highlighted the efforts of the distribution utility, pointing out that “thanking Meralco for conducting a fair and transparent bidding/CSP in accordance with the 2018 DOE Circular, which resulted in the award of PSAs to Phinma, SMEC and SPCC on basis of generation charges that were much lower than currently prevailing generation charges from gas and coal power generation companies.”

On September 9, Meralco informed the public that PHINMA Energy Corporation, San Miguel Energy Corporation and South Premiere Power Corporation were declared the best bids for the 1,200 MW contract capacity, to supply Meralco for a term of 10 years.

On September 11, it was announced that the Best Bids for 500 MW of mid-merit capacity for a term of five years were those of First Gen Hydro Power, Phinma Energy and South Premiere.

Palmones continued lauding the government’s CSP, by explaining “it was very encouraging to see Meralco for ensuring that the bids will be lower than current generation charges through the mechanism of a sealed reserve  

LCOE cap, which was lower than prevailing generation charges. In fact, the bids of Phinma, SMEC and SPCC were even lower than Meralco’s reserve LCOE cap, thus proving that the Meralco bidding created a very price competitive atmosphere which resonates across all bidders.”

“As reported by media, the resulting prices from the CSP are significantly lower than their average generation cost today of around PhP 5.88 per kWh (VAT inclusive). And based on the news, along with the results of first successful CSP, consumers are projected enjoy total savings of around P13.86 billion per year, or a rate reduction of P 0.41 per kWh,” said Palmones.

The group expressed support for the CSP and the results of the process, saying that “from a consumer group perspective, we are confident that these new contracts will ultimately lead to the much-needed additional power supply to address our growing demand in the country. Moreover, this is a big step in achieving the country’s objective to increase supply at lower costs. The bid prices submitted were pro-consumers. Based on reports, MERALCO’s 6.7 million residential customers will enjoy lower rates for the next 10 years.”

Palmones stated his belief in the CSP, highlighting that, “as reported by media, this is a process that tries to combine best practices of both private and public procurement. It was reported that the savings for a typical household of PhP0.41per kWh translates to annual savings of around PhP984 per year.”