Meralco finalizing new TOR for 1,200 MW supply

Credit to Author: Jordeene B. Lagare| Date: Tue, 25 Feb 2020 16:39:16 +0000

MANILA Electric Co. (Meralco) is close to finalizing its terms of reference (TOR) for the competitive bidding covering 1,200 megawatts (MW) of new supply, which could be published in about two months.

If the revised TOR will be finalized and published next week, “the bidding will be [conducted] in two months after [the bid submission date],” said Jose Ronald Valles, Meralco first vice president and head of regulatory management.

The Department of Energy (DoE) has given its green light for the power distributor to issue the revised TOR for the second round of competitive selection process (CSP) for greenfield capacity.

“We received recently the letter of the (Energy) secretary confirming that they have granted our request for clearance to publish. The TPBAC (third party bids and awards committee) of Meralco is currently going over revised TOR and we wait for their advise as to when will this be published,” Valles told reporters.

But before releasing the guidelines involving 1,200 MW of capacity, the listed firm would seek the DoE’s guidance on the concern raised by GNPower Ltd. Co. regarding replacement power.

“The concern raised by GNPower was about the obligation for replacement power. They are saying that the generator, prospective bidder, cannot afford to have zero outage allowance. They are asking for 30 days scheduled maintenance and 15 days forced outage allowance to be reflected in TOR,” Valles said.

“On the part of Meralco, we intend to file a letter to the DoE in response to the query made by a prospective bidder with respect to replacement energy. We will need to await for DoE clarification on that before we finally decide to publish the TOR,” he said.

The Meralco official explained that in the firm’s existing power supply agreements (PSAs), the distribution utility (DU) would have the obligation to procure the replacement power and charge that to consumers.

But beyond the given outage allowance, he said the generator would have to secure that replacement power at their own risk.

Last September, Meralco conducted the CSP for the supply coming from a greenfield power plant or a power facility that is yet to be constructed but was declared a failure after Atimonan One Energy Inc., a subsidiary of Meralco PowerGen Corp., the power generation arm of Meralco, emerged as the lone bidder for the auction.

The Energy department then asked the power distributor to tweak provisions for the public bidding to encourage more participants and ensure power supply in the country.

Meralco published in December last year the second invitation to bid but the company announced the following month that it would update the terms.

“Finally, there was meeting of minds already,” Energy Secretary Alfonso Cusi said earlier. “This just shows na that we are really looking into every detail.”

Meralco President and Chief Executive Officer Ray Espinosa said the amended TOR was crafted in a way that would allow newly built power plants and/or facilities that have been in existence for 25 years or less to participate.

“The way the TOR is structured, pretty much the plant that will be awarded or the winning bid, will have to be a new plant because the requirement is a plant must not have achieved COD (commercial operations date) by 2020,” Espinosa said.

“If you take it into account, a plant let’s say that COD this year 2020 would still be a new plant relatively because the way we look at new plants is 25 years. Nasa loob pa siya ng 25 years (It’s still within the 25-year lifespan),” he added.

Meralco shares decreased by P8 or 2.96 percent to end at P262 apiece on Monday.

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