Meralco PSA mean cheaper power for consumers

Meralco on Monday signed power supply agreements (PSA) that guarantee the distributor 500 MW of mid-merit capacity effective 26 December 2019 for a term of five years.

The contracts will be subject to regulatory proceedings and evaluation by the Energy Regulatory Commission (ERC).

The competitive selection process (CSP) bidding was done on 11 September in accordance with the Department of Energy (DoE) circular requiring distribution utilities to procure power through the CSP. The CSP was administered by the Third-Party Bids and Awards Committee (TPBAC) constituted pursuant to the DoE circular.

The Meralco TPBAC is chaired by lawyer Ferdinand Domingo, who was selected as consumer representative, together with lawyer Adrian Cristobal Jr., another consumer representative.

Cristobal was a former Secretary of the Department of Trade and Industry. The selection of consumer representatives was approved by the DoE.

After the opening and evaluation of the bids, the TPBAC declared the bids submitted by First Gen Hydro Power, Phinma Energy and South Premiere Power to be the best bids. The bidding for the 500 MW was witnessed by representatives from the DoE.

The best bids underwent post-qualification and the TPBAC issued the respective Notices of Award on 12 September 2019 followed by the signing today of the PSA with Meralco. First Gen Hydro Power Corporation’s contract capacity is for 100 MW with an all-in headline rate (VAT inclusive) of P5.1908/kWh and computed all-in levelized cost of energy (LCOE, VAT Inclusive) of P5.3989/kWh.

Phinma Energy Corporation’s contract is for 110 MW at all-in headline rate (VAT inclusive) of P5.5858/kWh and computed all-in LCoE (VAT Inclusive) of P5.5858/kWh.

South Premiere Power Corporation’s contract is for 290 MW and has an all-in headline rate (VAT Inclusive) of P5.5347/kWh and computed all-in LCOE (VAT inclusive) of P5.7527/kWh.

Meralco declared Monday’s successful PSA signing will result in additional savings and, ultimately, least cost to consumers.

Earlier, Meralco also successfully signed 1,200 MW of baseload capacity on 13 September. During the signing, SMC President Ramon Ang said, “Actually we were hesitant to join the bidding. There was no fuel pass-on. The risk was high. But I know (Meralco President Ray Espinosa) was trying to protect the consumer.”