Senator Cayetano Calls for Delay in Meralco Bidding Over Fairness Concerns

MANILA — Senator Alan Peter Cayetano has proposed a review of the bidding process for the Manila Electric Company’s (Meralco) power supply requirements, advocating for a delay until the terms of reference (TOR) are assessed to ensure equitable treatment of all bidders and to secure the most cost-effective energy supply.

According to Philippines News Agency, filed by Cayetano on July 29, there is a push for Meralco to postpone its competitive selection process (CSP) for its 600-megawatt and 400-megawatt requirements. The senator highlighted issues with the current TOR during a public hearing held by the Senate Committee on Energy on July 18, where concerns were raised about the impending depletion of Malampaya gas and the transition to cleaner fuel sources. Cayetano noted that the TOR in its current form could potentially favor bidders using imported coal over those utilizing indigenous natural gas, thus not aligning with the objectives of the Electric Power Industry Reform Act (EPIRA) and recent Department Orders advocating for a clean energy mix.

Further, Cayetano criticized how Meralco’s TOR potentially disadvantages natural gas suppliers by treating the historical actual costs of non-fuel items as merely evaluative and non-binding, allowing other bidders to present lower initial fuel costs that could later result in higher charges to consumers. The resolution insists on revising the TOR to ensure that all power suppliers capable of offering the lowest costs are fairly considered, thus protecting consumer interests and promoting the use of indigenous energy sources.

Additionally, discrepancies in the definitions used in Meralco’s TOR, such as “greenfield,” were pointed out by Cayetano. While the Energy Regulatory Commission defines “greenfield” as projects that are not yet existing, constructed, or financed, Meralco’s definition includes plants operational since January 2020, potentially skewing the bidding process.