Meralco last 11 September awarded PSA to Phinma Energy Corp., San Miguel Energy Corp. and South Premiere Power Corp.

Manila Electric Co. (Meralco) last 11 September awarded PSA to Phinma Energy Corp., San Miguel Energy Corp (SMEC) and South Premiere Power Corp. (Contributed photo)

The success of the Competitive Selection Process (CSP) on the awarding of power supply contracts showed that efforts to reduce the cost of electricity is within reach under the current administration, House Committee on Energy chairman Marinduque Rep. Lord Alan Velasco said.

Velasco lauded Department of Energy (DoE) Secretary Alfonso Cusi in light of the recent signing of the new power deals.

The Supreme Court, in a recent decision, directed the holding of CSP in securing power supply agreements (PSA).

Manila Electric Co. (Meralco) last 11 September awarded PSA to Phinma Energy Corp., San Miguel Energy Corp (SMEC) and South Premiere Power Corp (SPCC).

“This is a welcome development which is aligned with the Duterte administration’s goal of bringing down the cost of electricity and ensuring a steady and continued supply of power across the country,” Velasco, who is geared for the Speakership post under an agreement with Taguig Rep. Alan Peter Cayetano, said.

“We laud the DoE and its head, Secretary Alfonso Cusi, as well as industry players and stakeholders for acting swiftly to boost government initiatives in finding ways to provide adequate power supply at lower costs to the end-users,” he added.

According to Meralco, the recently-signed agreements will result to additional savings and least cost to consumers.

The three firms offered the lowest rates for Meralco’s 1,200-megawatt (MW) demand.

Phinma offered 200 MW at a rate of P4.750 per kilowatt-hour (kwh), SMEC offered 330 MW at P4.6314 per kwh, while SPCC submitted 670 MW capacity also at P4.6314 per kwh.

The CSP was administered by the Third-Party Bids and Awards Committee that was constituted pursuant to a DoE circular issued in 2018 requiring distribution utilities to procure power through competitive bidding.

Under the contract, the power supplier which failed to provide the contracted capacity shall pay a fine of P908 for each megawatt-hour used per day that will be applied on the generation charges to consumers.

DoE, likewise, repeated an assurance that a shortage of petroleum products is far-fetched despite the recent drone bombing of oil facilities in Saudi Arabia.

Cusi said at the “Kapihan sa Manila Bay” forum that the country has a healthy stock of petroleum good for 30 days. However, he clarified that a sudden spike in oil prices is expected similar to what happened during the first quarter when US President Donald Trump sanctioned Iran. The price then of oil products soared by up to P5 per liter.

The Energy chief said pricing was in the hand of oil companies, and the government can only check on added cost it incurred compared to pump prices.

“The important thing is that President Duterte wanted to ensure adequate supply to keep the economy going,” he said.

The DoE also admitted that not only Saudi Arabia had been the source of imported fuel, as other oil producers can be tapped such as China, Brunei, Korea, US and USSR.

Also as part of the contingency, the government through the DoE is to come up with the proposal on crafting a bill that will allow stockpiling of oil where complete storage facilities under the strict supervision of experts and with ample budget to run the said facilities, according to Cusi.