Cusi wants changes in Meralco’s TOR for CSP

MANILA, Philippines — Energy Secretary Alfonso Cusi wants Manila Electric Co. (Meralco) to change the terms in its competitive selection process (CSP) for greenfield capacity.

Meralco has already submitted the new terms of reference (TOR) to the Department of Energy (DOE) for its approval, its president and chief executive officer Ray Espinosa said.

“They will review it already. We’re hoping we (get) cleared this week so we can publish (the invitation) this week,” he said.

Meralco conducted the CSP for the 1,200-MW greenfield capacity earlier this month but was declared a failed bidding after only Atimonan One Energy Inc., a unit of Meralco Powergen Corp., submitted its offer.

Under the terms, Meralco wants the generation companies to bid for the whole supply requirement using plants with high efficiency, low emission technology.

However, Cusi does not want Meralco to contract the full capacity of the genco participating in the bid.

He said any greenfield plant could opt to contract or sell only a part of its capacity to a distribution utility.

This is to allow the remaining capacity to be sold to the wholesale electricity spot market for reserves.

“We just don’t like it to be limiting, so we encourage more participation so we can improve our energy capacity, rates, energy reliability,” Cusi said.

The energy secretary has been urging the private sector to invest in merchant plants to further spur competition in the electricity spot market. Merchant plants are those power plants selling their output to the Wholesale Electricity Spot Market.

Currently, 90 percent of the country’s power supply is sourced from bilateral contracts between power generators and DUs. This means only 10 percent of the supply comes from WESM.

The DOE earlier pitched to increase the volume of the spot market to 20 percent.