Manila Electric Co. (Meralco) declared South Premiere Power Corp. (SPPC), subsidiary of San Miguel Global Power Holdings Corp. (SMGP), as best bidder following submission of its lowest bid for the 1,200-megawatt (MW) baseload requirement of the power distribution company.
Three bidders submitted offers during the bid submission deadline on Tuesday, Jan. 23, but SPPC’s offer was declared as the best bid by Meralco’s Bids and Awards Committee for Power Supply Agreements (BAC-PSA).
SPPC’s offer is lower than the reserve price set by the BAC-PSA at P7.1538 per kWh for total levelized cost of electricity (LCOE) rate. SPPC offered an LCOE of P7.0718 per kWh for 1,200 MW of capacity.
The unincorporated joint venture of Limay Power, Inc. and San Roque Hydropower, Inc., meanwhile, submitted the next best bid after it offered a rate of P7.1006 per kWh for 150-MW capacity. Limay Power and San Roque are also subsidiaries of SMGP.
First Natgas Power. Corp. (FNPC) of First Gen Corp. offered a rate of P8.4489 per kWh for 210 MW of capacity. Meralco’s BAC PSA said that, except for the offer of FNPC, all other offers received were below the reserve price. All submissions have passed the criteria contained in bidding documents and pre-qualification evaluation.
The BAC-PSA is also set to conduct a post-qualification evaluation and submit its recommendation and report to the Meralco board for approval of the best bid, prior to the issuance of a Notice of Award.
Meralco BAC-PSA chairman Lawrence Fernandez said the distribution utility has complied with Department of Energy (DOE) Department Circular No. DC2023- 06-0021, Series of 2023 and Energy Regulatory Commission (ERC) Resolution No. 16, Series of 2023, which require that the bid be conducted in an open and transparent manner.
The submission of bids was also streamed live to ensure transparency and fairness.
“Meralco, as a highly-regulated entity, has conducted its business in full compliance with the rules and regulations promulgated by the ERC and DOE. All contracts resulting from this CSP (competitive selection process) will be subject to the regulatory proceedings of the ERC,” Fernandez said.
Meralco said the Terms of Reference’s conformity to its Power Supply Procurement Plan was reviewed and approved by DOE and followed the DOE’s recommendation that, pursuant to its Oct. 11, 2023 advisory (on the conduct of CSP for power supply using indigenous natural gas as transition fuel), the bidding highly encouraged the participation of power suppliers with natural gas fired power plants and prioritized the use of indigenous natural gas.
The bidding documents were also updated to consider the recommendations of ERC chairperson Monalisa Dimalanta.
Meralco sought offers for its 1,200 MW baseload requirements to ensure continued availability of sufficient and reliable electricity supply for its customers. It is meant to meet the power distributor’s future capacity requirements, including the 1,000 MW supply that was covered by its PSAs with change in circumstance cases that are pending resolution with the courts.