Meralco withdraws power deals with 3 firms

Manila Electric Co. (Meralco) has withdrawn its power supply agreements (PSA) with three companies in light of a Supreme Court (SC)order requiring all distribution utilities to undergo competitive bidding.

The verdict invalidated the resolutions issued by the ERC postponing the CSP requirement in October 2015 and March 2016

A copy of separate orders from the Energy Regulatory Commission (ERC) dated 13 August was only made public on Wednesday. It shows that Meralco withdrew its PSA with Redondo Peninsula Energy Inc., Atimonan One Energy Inc. and Global Luzon Energy Development Corp.

The ERC granted all withdrawal applications.

Distribution utilities (DU) have been constrained to pull out from all applications after the SC — reacting to a petition filed by the Alyansa Para sa Bagong Pilipinas Inc. versus the ERC, the Department of Energy, and Meralco — ruled in May this year that all PSA entered into by distribution utilities shall undergo competitive selection process.

The PSA covered those that were filed on or after 30 June 2015.

Competitive selection process (CSP) is designed to protect consumers, and rules require DU to get at least two offers for power supply before awarding a deal, ensuring that consumers get the least cost.

The verdict invalidated the resolutions issued by the ERC postponing the CSP requirement in October 2015 and March 2016, respectively — which the SC regarded as grave abuse of discretion amounting to lack or excess of jurisdiction.

Apart from the three, Meralco has other power deals with Mariveles Power and Central Luzon Premiere, St. Raphael Power Generation Corp. and Panay Energy Development Corp.