The Institute for Climate and Sustainable Cities (ICSC) supported the energy department’s call for Meralco to be more transparent and flexible in the energy bidding requirements per competitive selection process (CSP).
“In adherence to the prescribed spirit of free and fair competition, both existing and new power plants should be allowed to join Meralco’s upcoming bidding for a 1,200-megawatt (MW) power supply agreement (PSA),” Senior Policy Advisor of ICSC Atty. Pedro H. Maniego Jr. was quoted as saying in an Inquirer report.
It was also explained that the Department of Energy (DOE)’s proposal to divide the supply requirement into smaller amounts and to allow stacking of bids will foster the desired competitive structure in accordance to the Electric Power Industry Reform Act (EPIRA) of 2001. This was forwarded by Energy Secretary Alfonso G. Cusi in hopes to resolve the rebidding of the 1,200 MW greenfield power supply requirement of Meralco.
Cusi provided inputs on how the contract should be bidded out but Meralco still insisted on its own terms of reference.
“Secretary Cusi’s instruction, once applied on all competitive selection processes, would give small power generation companies an opportunity to bid and win portions of large supply requirements. Without stacking, only one bidder and one price for the entire capacity will win, which would exclude small renewable energy (RE) companies that can offer less expensive electricity at firm prices over the life of the supply agreement. The issue transcends Meralco’s CSP rules, since the country’s 16 privately-owned distribution utilities as well as all 119 electric cooperatives should allow both existing and new power plants of all sizes to join the bidding of their power requirements in order to get the least cost of electricity,” Maniego stated in the report.
The changes being pushed forth will also allow RE firms to bid for portions of the power requirements of the distribution utilities.
“Consumers will benefit from the participation of the RE companies because electricity costs from RE sources continue to fall, as evidenced by historical data and studies. RE companies’ participation in the bidding, if allowed and successful, will reduce the country’s dependence on power plants that run on traditional and carbon-intensive fossil fuels such as coal,” Maniego explained.
Currently, the country imports 75 percent of its coal requirements; and while fossil fuel prices are subject to fluctuations in the world market, RE sources utilize indigenous resources and/or consume no fuel.
“In deciding for the best alternative for a secure, stable and affordable energy future for our country, let us afford the highest importance to sustainable development and mitigating climate change,” Maniego was quoted as saying.