The Manila Electric Company (Meralco) is eyeing to release the revised terms of reference (TOR) for the competitive bidding of a 1,200 MW power supply contract.
“I hope we can publish this week,” Meralco President and CEO Ray Espinosa said during an interview on Monday.
The competitive selection process (CSP) has been postponed in the past because of the Department of Energy’s (DOE) recommendation to relax the TOR to attract more participants.
The previous issue was about replacement power and outage allowance. Espinosa added that this was already cleared by the DOE.
“It’s ok with them. There is still outage allowance. They understand it,” Espinosa said.
Meralco cited one of the issues of the bidders to the DOE.
“The concern raised by GNPower was about the obligation for replacement power. They are saying that the generator, prospective bidder, cannot afford to have zero outage allowance. They are asking for 30 days scheduled maintenance and 15 days forced outage allowance to be reflected in the TOR,” said Espinosa.
The DOE wanted to implement a zero outage to protect consumers from the huge cost it brings.
“We’re raising it to the DOE because they required it, they have their reasons but the bidders are saying, what about the investors, the power supplier. It was a commercial industry practice before it was changed by the DOE,” he said.
Under the previous power supply agreements of Meralco, Espinosa said Meralco is responsible for the procurement of replacement power and consumers will shoulder the power replacement charge, within the 30-day and 15-day outage allowances. Beyond the outage allowance, Meralco will be responsible to get replacement of power at its own risk, Espinosa explained.
“That’s why it became important to work out a good terms of reference so we’re able to attract more bidders. I think we have a balance and good TOR already, subject to only one clarification, which relates to the replacement power, obligations related to outages. After that, we should be good to go. We’re confident that with the way the TOR has developed, it will be looked at by potential bidders as good terms of reference and should attract a good number of qualified, serious bidders,” he said.
The revised TOR includes stacking of capacity of several power plants to meet Meralco’s 1,200 MW supply requirement, as well as allow merchant power plants to participate in CSP.