After earlier arbitrarily canceling its power supply agreements, or PSA, South Premiere Power Corp., or SPPC, a power unit of San Miguel Corp., regained its contracts with the Manila Electric Co., or Meralco, for the supply of 1,200 megawatts, or MW, of electricity.

This followed after SPPC won Meralco’s government-mandated competitive selection process for the power requirement.

Three bidders submitted qualification documents, technical proposals, and bid offers on 23 January.

Of the three, the Meralco Bids and Awards Committee for Power Supply Agreements, or BAC-PSA, declared that SPPC had the best bid with the lowest offer for Meralco’s baseload requirement.

SPPC offered an electricity rate of P7.0718 per kilowatt-hour, or kWh, for the entire 1,200-MW requirement.

Roque Hydropower Inc., meanwhile, submitted the next best bid, offering a rate of P7.1006 per kWh for 150-MW capacity.

For a capacity of 210 MW, First Natgas Power. Corp., or FNPC, offered a rate of P8.4489 per kWh.

Except for the offer of FNPC, and the BAC-PSA, all other offers received were below the P7.1538 per kWh reserve price set for the CSP.

All submissions passed the criteria contained in the bid documents and pre-qualification evaluation.

During the CSP, the bid documents were updated to consider the recommendations of Energy Regulatory Commission chairperson Monalisa C. Dimalanta.

Bouncing back strong

SPPC, which operates the Ilijan natural gas plant, also offered the lowest bid to Meralco under a straight pricing deal last year but it later sought a temporary price adjustment that the ERC denied.

SPPC sought relief from the Court of Appeals and was granted a temporary restraining order that it used to terminate its PSA.

The resulting 15-year PSA from this CSP will cover Meralco’s future capacity requirements, including the 1,000-MW supply that was covered by its PSAs with change in circumstance cases that are pending resolution.

The BAC-PSA is also set to conduct a post-qualification evaluation and submit its recommendation and report to Meralco’s board of directors for approval of the best bid as the winning power supplier before the issuance of a Notice of Award.

For his part, Meralco BAC-PSA Chairman Lawrence S. Fernandez reaffirmed that the company complied with the Department of Energy and ERC mandate to hold a transparent bidding.

“Meralco, as a highly regulated entity, has conducted its business in full compliance with the rules and regulations promulgated by the ERC and DoE. All contracts resulting from this CSP will be subject to the regulatory proceedings of the ERC,” Fernandez said.

Additionally, the conformity of the terms of reference to Meralco’s Power Supply Procurement Plan was reviewed and approved by DoE and followed the recommendation of prioritizing bidders who use indigenous natural gas.