13 September 2019 – MANILA Electric Co. (Meralco) has awarded power supply agreements (PSA) covering 1,200 megawatts (MW) to units of San Miguel Corp. (SMC) and Ayala’s AC Energy, Inc.
In a disclosure to the stock exchange on Thursday, the listed company identified the winning bidders during the competitive selection process (CSP) for its power requirements to be Phinma Energy Corp., San Miguel Energy Corp. (SMEC) and South Premiere Power Corp. (SPPC). AC Energy owns Phinma Energy, while SMEC and SPPC are both units of SMC.
Phinma Energy will supply Meralco with 200 MW, while SMEC and SPPC will tender 330 MW and 670 MW, respectively. The ten-year contract will run from Dec. 26, 2019 to Dec. 25, 2029.
Meralco said the three firms were issued their respective Notices of Award after passing the post-qualification evaluation. They will then require approval from the Energy Regulatory Commission (ERC).
A total of five companies participated in the bidding process, with the other two being SMC Consolidated Power Corp. and Masinloc Power Partners Co. Ltd.
The company earlier said that Phinma Energy’s bid was at a rate of P4.7450 per kilowatt-hour (kWh). SMEC’s bid was at P4.6314 per kWh, while SPPC’s was at P4.6314 per kWh.
The resulting prices from the selection process are lower than Meralco’s current average generation cost of about P5.84 per kWh. Once implemented, the new supply agreements could lead to savings of more than P9 billion annually for a 10-year period.
This is expected to reduce costs for consumers.
Should the power suppliers fail to provide their contracted capacity, they shall pay a fine of P908 multiplied by each MW-hour per day. This will be used to reduce the generation charge to consumers.
Meanwhile, Meralco also said that there were three winning bidders to supply their mid-merit power requirement of 500 MW from Dec. 26, 2019 until Dec. 25, 2024. This includes First Gen Hydro Power Corp for 100 MW, Phinma Energy for 110 MW, and SPPC for 290 MW.
They will still undergo a post-qualification evaluation and need approval from the ERC.
Meralco has another 20-year contract for 1,200 MW of its power requirements up for bidding.
Meralco’s net income attributable to the parent was flat at P12.007 billion in the first half of 2019, as revenues went up 9.57% to P164.95 billion.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.
Shares in Meralco fell 0.99% or P3.60 to close at P360 each at the stock exchange on Thursday.