Meralco reiterates that the conduct of the Competitive Selection Process (CSP) for its supply requirements adheres to the existing rules of the Department of Energy (DOE) and the Energy Regulatory Commission (ERC), and complies with the mandate under the EPIRA to secure the least-cost supply in an open and transparent manner.

“None of the prospective bidders, even the generation companies that use the Malampaya gas, raised issues that can be a basis for postponement of the bidding, hence, Meralco has no valid ground to do so,” said Meralco Senior Vice President and Head of Regulatory Management Jose Ronald V. Valles.

Regarding previous CSPs that were questioned, Meralco emphasized that the Terms of Reference (TORs) have certificates of conformity from the DOE. In fact, the ERC found Meralco’s recent 1200MW CSP to be fully compliant with existing laws and regulations, which led to the ERC granting a Provisional Authority to implement the resulting Power Supply Agreement (PSA). This CSP included participation from First NatGas’ San Gabriel plant, which submitted a very high price, making it non-compliant.

“Again, any generation company can submit offers for these CSPs. While we prioritize power plants using indigenous fuel as required by the DOE, we have to ensure that it will not violate our least-cost mandate under the law. There is no preferential treatment, and Meralco always awards contracts to the compliant bidder offering the lowest cost,” Valles reiterated.

Meralco also clarified that the Santa Rita and San Lorenzo plants, which use Malampaya natural gas, could not join the earlier 1800MW baseload CSP because they were fully contracted with Meralco on the delivery date of the requirements. These plants had no extra capacity to meet Meralco’s 1800MW requirement.

Although San Gabriel, another plant using Malampaya gas, participated in the bidding for a 1,200 MW capacity, its offer of PHP 8.45 per kWh was still above the reserve price set for that CSP and was therefore non-compliant. The offer was significantly higher than the winning bid of approximately PHP 7 per kWh.

Contrary to some misleading allegations, the TORs for all Meralco CSPs apply equally to all bidders, with no discrimination or preferential treatment. The Reserve Prices and the bid offers submitted by bidders include all costs, including fuel and fuel-related costs, with no hidden charges. No costs not submitted by the bidder will be allowed as pass-through charges under the PSAs.