FPI lauds Meralco’s new PSA

FPI believes that these new contracts will mean more consistent power supply for all businesses and positively impact and benefit industry operations.

The Federation of Philippine Industries (FPI) recently lauded the successful Power Supply Agreements (PSA) signing for contracts to supply Meralco 1,200 MW and 500 MW of capacity effective 26 December, 2019.

FPI chairman Jesus L. Arranza praised the signing of the additional contract capacity, saying, “FPI welcomes the news of this much-needed additional power, to meet the growing demand of our country. We welcome the entry of any and all generation companies interested in contributing to the grid, in order to create a more secure power supply situation for all industries, and ultimately, all consumers.”

The group expressed support for the Department of Energy (DoE) Circular requiring Distribution Utilities to procure power through Competitive Selection Process (CSP). The CSP was administered by the Third-Party Bids and Awards Committee (TPBAC) that was constituted pursuant to the DoE Circular.

FPI stated, “The organization believes the correct and proper process was indeed prescribed by the DoE, and we thank the government for its hands-on approach with the CSP. As the entire process was personally witnessed by representatives from the DoE, industries can rest assured that the results are fair, transparent, and most importantly, beneficial to all customers and consumers of power.”

Arranza expressed optimism over the impact that these new PSA will bring to the cost of electricity, explaining that “today’s successful PSA signing will result in additional savings and, ultimately, least cost to consumers. We are confident that both the distribution utility and the power generators are committed to protecting the consumer, and we know the government fully backs these efforts as well.”

“The most important thing is that the consumers are benefitting. Industries can only hope that the remaining members of the sector will follow suit, as the CSP promises to deliver very positive benefits to the Filipino consumer. This is only the first step, but FPI’s vision for CSP is for more and more generation companies to join the process and participate in the bid,” he said.

FPI highlighted the terms of the PSA, emphasizing that “the generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers. The group believes that these new contracts will mean more consistent power supply for all businesses, which will positively impact and benefit industry operations, lower costs, consequently leading to more empowered consumers.”

Reports show that because of these newly signed PSs, consumers are projected to enjoy total savings of around P13.86 billion per year, or a rate reduction of P 0.41 per kWh.