PH real estate bullish on government push for sustainable power in 2020
“Reliable sources of power keeps prices of real estate developments stable for consumers, and adds value to the concerned project,” Jeffrey Ng, president of Cathay Land, told the Manila Standard. “This serves as an inspiration, or benchmark, to future projects from developers of all scales.” Added Antonio Jaime Jose V. Fernandez, strategic management consultant, of Menarco Development Corp.: “power is important for developers…this is what our customers want. If the government and private sector can deliver on this, this would be an ideal scenario.” Transparent, market-driven The CSP, borne out of a Supreme Court ruling that all power supply agreements (PSAs) are now obliged to undergo the CSP, allows all potential suppliers to bid for the contract, and get the best power deal for consumers. The PSA is a requirement from the Energy Regulatory Commission (ERC) and Department of Energy (DOE) to encourage generation companies to build power plants in order to meet the country’s demand aimed at making the cost of electricity product more transparent and market-driven. Fernandez pointed to the Menarco Tower, a 32-storey office building along with the 32nd tower in BGC, by the Menarco Development Corporation. The project, which recently garnered a Well gold certification from the International Well Building Institute (IWBI) Asia, is an example, of a development that measures and monitors the health and well-being of buildings and its occupants. A chief executive officer of a leading real estate development company e-mailed the Manila Standard, noting that most of their customers “expect that stable and reliable power is a given.” The CEO, who declined to be identified, explained that power supply is critical, for example for BPO-type projects that run for 24 hours. “You’d be surprised how much power a fully-staffed BPO office consumes,” the executive, whose company recently tied up with a Japanese real estate giant to build a major condominium/mall project in one of Metro Manila’s central business districts, said. “Its not just the masses of computers, but also the large servers and other equipment, plus the A/C needed to keep everything and everyone cool,” he explained. Power is one of the biggest expenses of this type of company so, a predictable power cost is an advantage because BPO companies will need to commit to their clients a stable processing fee for the work that they do.” Real market forces The first CSP conducted by power distributor Meralco, and administered by a Third-Party Bids and Awards Committee (TBAC), last October resulted in three successfully bidded PSAs with three companies for the supply of a 500 MW megawatt of mid-merit capacity for a term of five years. Meralco signed the PSAs with First Gen Hydro Power Corp., Phinma Energy Corp. of the Ayala Group and South Premiere Power Corp. of San Miguel Corp. after their respective offers were declared to be the best bids by the third party bids and awards committee. Various industries lauded the PSAs, which reportedly paves the way for market forces to determine the electricity rates small, medium and large-scale businesses would pay. The policy to subject power supplies to a competitive selection process, or bidding, makes the cost of electricity product more transparent and market-driven, businessmen pointed out. “FPI welcomes the news of this much-needed additional power, to meet the growing demand of our country,” said FPI chairman Jesus Arranza in a statement. “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, a prime mover of Philippine industries, expressed support for the Energy Department circular requiring distribution utilities to procure power through the competitive selection process, or bidding.