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DOE asks Meralco to speed up its CSP on power projects

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By Myrna M. Velasco

Following the overwhelming decision of the Supreme Court (SC) on the supply contracting case of distribution utilities, power utility giant Manila Electric Company (Meralco) has been directed to fast-track its conduct of competitive selection process (CSP) so it can still move forward to implementation phases for its power plant projects.

Energy Secretary Alfonso G. Cusi (Source: https://www.bloomberg.com)

Energy Secretary Alfonso G. Cusi (Source: https://www.bloomberg.com)

“For Meralco, they have to do it (CSP) fast. Don’t waste time,” Energy Secretary Alfonso G. Cusi has sounded off to reporters when asked on what could be the prudent move of the distribution utilities (DUs) knocked down by the high court ruling.

The SC verdict had its heaviest blow on the Meralco-underpinned power supply agreements (PSAs) because that entailed prospective capacity addition of more than 3,000 megawatts already hobbled toward development.

Of the 90 contracts invalidated by the judicial ruling, seven are major contracts underwritten by Meralco – some of the power projects of which are with its subsidiary Meralco PowerGen.

Cusi noted “the decision of the Supreme Court is very clear. We just have to follow it to the letter.” He added that coordination had likewise been pursued with the Energy Regulatory Commission (ERC) so the required bidding process could be sorted out.

For the power projects already in the utility firm’s lineup, the ones advancing prior to the Supreme Court ruling had been the 1,200-MW Atimonan coal-fired power project in Quezon province; and the other is the 600MW Subic coal-fired plant.

The other proposed facilities are due for developments by affiliate Global Business Power Corporation; as well as partner Semirara Mining and Power Corporation; and by SMC Global Power Holdings of the San Miguel group.

The energy department is still assessing the extent of the impact of the SC decision on the supply contracts of other DUs and electric cooperatives – with it keeping track of the power utilities that may be losing fraction of their supply portfolio.

As mandated in the SC verdict, it shall be the DOE that shall oversee the competitive bidding process for PSAs – and to the department’s take, this must be done “in an open, transparent, effective and efficient manner.”

In addition, the energy chief noted that his department will be “asking all DUs in the country to submit annual supply-demand projections for the next three years – and from 2023 to 2030 to ensure that they have sufficient supplemental power supply levels to meet their respective franchise obligations in the years to come.”

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