We still need to be vigilant on CSPs to guard vs power rate hikes -- solon

November 14, 2019

Bayan Muna chairman Neri Colmenares  urged the public to be more vigilant against Meralco bidding its supply contract to its own company saying that such could lead to inordinately high rates and power rate hikes for twenty years.

He calls on the Department of Energy (DOE) to intervene and set aside the difficult and one sided bidding terms imposed by Meralco to ensure that more bidders with lower price offers could come in.

"Meralco conducted 3 biddings or CSPs and because it controls the bidding, the terms it imposed on these biddings proved  very disadvantageous to bidders except for Meralco’s own company Atimonan 1. Despite the difficult conditions imposed, some power suppliers were forced to bid on the two power supply contracts for 1,700 megawatts. Had Meralco not imposed difficult conditions in the two bidding, the resulting bid prices would have been lower for after all, the price of electricity at the retail supply market is lower,” said Bayan Muna Chairman Neri Colmenares.

“The problem, however is with the third bid for a 1,200 megawatts twenty year contract which resulted in only Meralco’s Atimonan I submitting a bid because of the very steep and almost impossible conditions imposed by Meralco on the other bidders. If there is only one bidder then the purpose of bidding, which is to find the lowest price supply, is definitely defeated. It is therefore imperative that the bidding terms imposed by Meralco should be amended to insure fair chance for all suppliers to make a bid at the lowest possible price," he added.

Colmenares, who has been battling unjust electricity rate increases for years, also asked the DOE to intervene and insist on its previous order to set aside the terms of references before any bidding is undertaken.

“The DOE should now intervene and declare Meralco's terms of references void and take control of the bidding process. After all the DOE has the power to demand that the purpose of its CSP policy be fulfilled in order to get the lowest possible price for electricity and protect the consumers from self dealing. The Supreme Court has practically granted the DOE this power in the recent case of ABP vs. ERC," said the progressive leader.