Three companies were awarded today with Manila Electric Company’s (Meralco) Power Supply Agreements (PSAs) worth a total contract capacity of 1, 200 MW effective on December 26, 2019 for 10 years.
PHINMA Energy Corporation signed a power supply contract with capacity of 200MW with an all-in headline rate of PhP4.7450/kWh, including value added tax (VAT), and Computed all-in LCOE of PhP4.8849/kWh.
San Miguel acquired a 330 MW at an all-in headline rate of PhP4.6314/kWh and Computed all-in LCOE of PhP4.9299/kWh.
South Premiere Power Corporation’s contract is for 670 MW and has an all-in headline rate of PhP4.6314/kWh and Computed all-in LCOE of PhP4.9300/kWh.
“We are confident that the prices resulting from this bidding are the least cost to consumers. In fact, the all-in rate already includes line rental and VAT and the cost of replacement power for all plant outages. Also, if the generator companies are unable to deliver power, they will be liable to pay a fine, which will be used to reduce the generation cost to consumers,” said Meralco President and CEO Atty. Ray C. Espinosa.
“The prices from the PSAs we are signing today are significantly lower than the average generation cost today of around PhP5.88/kWh (VAT inclusive). Once the PSAs are implemented, Meralco consumers are expected to save around PhP0.28/kWh or PhP9.46 billion annually for 10 years,” he added.
Espinosa noted that the bidding was a successful one and disproves recent claims that the bidding will not result in lower generation charges.
“This is a great day actually for customers. This is a day when we are able to deliver to them savings of more than P9.4 billion a year for the next 10 years through these three auspicious contracts.”
President and chief operating officer of San Miguel Corporation Ramon S. Ang also noted that bidding for the power supply contract was a high risk move for the company.
“Actually, we’re hesitant to join the bidding kasi grabe ang piga eh, ‘di ba? Sobrang baba tsaka walang fuel pass on. Talagang grabe ang risk. And I know Ray was trying to protect the consumer.”
“At the end, I think naisip nila, ang importante sa lahat na ito ay welfare of the consumers,” he added.
President and chief operating officer of PHINMA Energy John Eric Francia noted that the bidding process was very competitive that it should be renamed as “VCSP” or “very competitive selection process.”
“At least the most important thing was the consumers are benefitting. Kami na ang bahala to manage that risk,” he said.
The PSA signing was attended by representatives from the DOE and top officials from Meralco, Phinma Energy, San Miguel Energy and South Premiere Power.
