Court stops Meralco power supply bid

Court stops Meralco power supply bid | Daily Tribune

The Taguig City Regional Trial Court (RTC) has issued a temporary restraining order (TRO) to stop the Manila Electric Co. (Meralco) from bidding on a total of 1,000 megawatts (MW) of power supply deals for allegedly being disadvantageous to Malampaya-fueled power plants.

In a five-page Order promulgated on Wednesday, 31 July, Executive Judge Byron G. San Pedro of Taguig RTC, Branch 15-FC, granted the plea of the Malampaya gas field consortium for a 72-hour TRO against Meralco’s competitive selection process (CSP) for its 600 MW and 400 MW power supply requirements.

“There exists EXTREME URGENT NECESSITY for the writ as to warrant the issuance of TRO to prevent further damages to the plaintiffs’ interests, the government, and the environment,” the Taguig court ruled.

Members of the consortium operating the Malampaya gas field—Prime Energy, Prime Oil and Gas Inc, UC38 LLC, and the Philippine National Oil Exploration Corp (PNOC-EC) filed the complaint seeking the issuance of the 72-hour temporary restraining order (TRO) against Meralco prior to a permanent injunction.

Without a TRO, the petition said, the bidding would proceed and render the case moot. The Meralco CSPs for the new power supplies are scheduled on 2 August for the 600 MW and 3 September for the 400 MW.

Other bids affected

“Upon posting a TRO bond which is hereby fixed in the amount of (P5 million) let a (TRO) effective for 72 hours be issued in favor of the plaintiffs-applicants enjoining (Meralco) from conducting its CSP under its current Terms of Reference, including the receipt of bids, the award and the implementation of any award arising from (it),” it also stated.

With this, the RTC effectively halted Meralco’s invitation to bid for a contract capacity of 600 MW. The bid submission deadline was scheduled for 2 August. Likewise, the order also affects any other potential bidding processes that may have been planned after this date.

Additionally, the RTC order has also put on hold Meralco’s invitation to bid for a contract capacity of 400 MW, whose submission deadline was initially set on 9 August.

Both power deals were supposed to be effective in August next year.

In response to a 54-page complaint submitted by members of the Malampaya consortium, the lower court took action.

Before seeking a permanent injunction against Meralco, the petitioners, thus, requested the issuance of a 72-hour TRO.

The complainants contended that the bid terms contravene the preference accorded to indigenous natural gas by existing laws.

The petition said the terms governing the bids set by Meralco “violates the preference given to indigenous natural gas under relevant laws, rules and regulations.”

In a statement on Wednesday, Meralco senior vice president and head of Regulatory Management Jose Ronald V. Valles said the company has yet to receive a copy of the TRO.

Nonetheless, he maintained that the complaint against the power distributor has no legal basis.

“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,” Valles said.

“Again, any generation company can submit offers for these CSPs. While we prioritize power plants using indigenous fuel as required by 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 the contracts to the compliant bidder that offered the lowest cost,” he added.

Service Contract 38, which governs the Malampaya operations and has been extended for 15 more years, provides the government with a 60 percent share of net proceeds from gas sales.

Last year, the Philippine government earned P374 billion in revenue from the Malampaya natural gas field. In 2022, the government received at least P26 billion from the same source.