MANILA -- Consumers are projected to enjoy a total rate reduction of PHP0.41 per kilowatt hour (kWh) starting December 26, after the Manila Electric Company (Meralco) successfully conducted another bidding for a contract to supply 500 megawatts of mid-merit capacity.
In a statement, Meralco announced on Wednesday the three “best bids” submitted by First Gen Hydro Power, Phinma Energy, and South Premiere Power for the supply contract of five years duration.
The “best bids” will now undergo post-qualification and the Third-Party Bids and Awards Committee (TPBAC) is expected to issue the respective notices of award in favor of those who satisfactorily passed post-qualification on Thursday, to be followed by the signing of the power supply agreements with Meralco next week.
First Gen Hydro Power Corporation’s bid was for contract capacity of 100 MW, Phinma Energy Corporation for 110 MW, and South Premiere Power Corporation for 290 MW.
Meralco said the resulting prices from the competitive selection process (CSP) are significantly lower than their average generation cost today of around PHP5.88 per kWh, inclusive of value-added tax (VAT).
The distribution utility declared that Wednesday’s competitive selection process would result in a rate reduction of around PHP0.13 per kWh for consumers.
This is in addition to PHP0.28 per kWh from the 1,200 MW of baseload capacity it bidded out last September 9, which will be effective on December 26, 2019 for a term of 10 years.
Meralco noted the bids’ all-in rate already includes line rental and VAT, and the cost of replacement power for all plant outages.
The generator companies will also be liable to pay a fine if they are unable to deliver power, which will be used to reduce the generation cost to the consumers.
TPBAC chairman lawyer Ferdinand Domingo said “from a consumer perspective, I am confident that these new contracts will ultimately lead to the much-needed additional power supply to address our growing demand in the country. Moreover, we achieved our objective to increase supply at lower costs. The bid prices submitted were pro-consumers.”
Domingo said Meralco’s 6.7 million residential customers will enjoy lower rates for the next 10 years.
Lawyer Adrian Cristobal, a former trade chief and now president of SteelAsia Manufacturing Corp., said the savings for a typical household of PHP0.41per kWh translates to annual savings of around PHP984 per year. (PR)