Meralco seeks CSP deferment

Danessa Rivera (The Philippine Star) - April 29, 2020 - 12:00am

MANILA, Philippines — Manila Electric Co. (Meralco) plans to defer its competitive selection process (CSP)  for 1,200 megawatt greenfield capacity due to volatile oil prices and the enhanced community quarantine imposed in Luzon.

Meralco has sought the approval of the Department of Energy to discontinue its CSP after having updated its power supply procurement plan and distribution development plan (DDP).

The power utility firm took into account “actual demand for 2019 and acquisition of demand-side and supply-side resources to cost-effectively meet needs of customers.”

Instead, it will invite bidders to participate in the bidding for greenfield baseload capacity of 1,800 MW (net), for commercial operations in 2024-2025.

The 1,800 MW capacity will be taken from the discontinued 1,200 MW greenfield capacity plus a 600 MW portion from the 1,500 MW baseload supply supposedly scheduled for CSP this year.

While the terms of the new CSP undertaking was approved by the DOE, Meralco president and CEO Ray Espinosa said the coronavirus pandemic has prevented the power distributor from proceeding with the bidding.

The international oil market has been trading with much volatility, with prices ending lower for eight straight weeks since the coronavirus pandemic started drying up global demand for fuel.

“The volatility is so high that it would be difficult for us to have a proper valuation which is the distinguishing criteria to determine who will win in the CSP,” Espinosa said.

“The other problem with CSP today is the [quarantine] actually prevents us from holding face-to-face meetings with the bidders for conducting and receiving voluminous documents that will accompany each bid,” he said.

In September last year, Meralco conducted a CSP for the 1,200-MW greenfield capacity, but it was declared a failed bidding after only Atimonan One Energy Inc., a unit of Meralco Powergen Corp. (MGen), submitted its offer.

After the failed bidding, the DOE directed Meralco to open the second round of its CSP to all power plants—whether old or new—to truly allow competition and get the least cost of power for consumers.

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