MANILA ELECTRIC Co. (Meralco) on Monday denied claims of anticipated power rate increases resulting from closed bidding with generation companies that supply through gas-fired plants using imported liquefied natural gas (LNG).
In a statement, the power distributor said the conducted bidding aimed to secure enough power at the lowest cost.
Meralco closed the bidding for its 1,800-megawatt (MW) and 1,200-MW capacities for its baseload requirements last month.
“This is to minimize, if not avoid, dependence on the Wholesale Electricity Spot Market, where prices are known to be highly volatile especially during the dry season given the higher demand and the historically tight supply,” Meralco said.
The power distributor responded to claims by the consumer group People for Power Coalition (P4P), which warned of additional power rate increases if Meralco’s new contracts with generation companies using fossil fuels are approved.
“Meralco has already gone two for two with its worsening power prices. It seems to be hell-bent on making 2024 a year of expensive electricity for consumers,” P4P Convenor Gerry C. Arances said in a statement.
P4P cited the rate indication set by Meralco, which has projected an increase in February power rates, attributing the pressure on the generation charge to higher fuel prices, particularly on imported LNG used by gas-fired power plants.
“Meralco is set to begin its new contracts just as the country enters the summer, considered as the power industry’s peak season. Previous years saw the surge of power prices and widespread outages of fossil fuel plants during that period,” P4P said.
Meralco said that the conduct of competitive selection processes (CSPs) aimed “to benefit the public by ensuring sufficient and reliable energy at the most competitive cost” in accordance with the policies set by the Energy Regulatory Commission (ERC).
For the 1,800 MW baseload requirement, GNPower Dinginin Ltd. Co., Mariveles Power Generation Corp., and Excellent Energy Resources, Inc. (EERI) submitted the lowest bids.
GNPower, a partnership among Aboitiz Power Corp. through unit Therma Power, Inc., AC Energy and Infrastructure Corp., and Power Partners Ltd. Co., owns a 1,336-MW coal-fired power plant in Mariveles, Bataan.
Mariveles Power has a coal-fired power project in Bataan while EERI is constructing an LNG combined cycle plant in Batangas. Both companies are subsidiaries of San Miguel Global Power Holdings (SMGPH), the energy arm of San Miguel Corp.
Meanwhile, South Premiere Power Corp. (SPPC), another subsidiary of SMGPH, is advancing to the post-qualification stage after its bid has been declared as the most favorable for the 1,200-MW bid.
SPPC is the administrator of the natural gas-fired power plant in Ilijan, Batangas.
All contracts resulting from the CSPs will be subject to the regulatory proceedings of the ERC.
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 an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera