LAWMAKERS led by Laguna Rep. Dan Fernandez (lone district, Sta. Rosa) urged the Energy Regulatory Commission (ERC) to act on the terms set by Manila Electric Co. (Meralco) for 1,800 megawatts (MW) of electric supply that it is set to bid out.

Fernandez said ERC should stop Meralco from proceeding with the bidding until a review and study of its terms of reference (TOR) are completed. The lawmaker made the statement after delivering a privileged speech.

Meralco “is the one dictating terms to the suppliers,” said Fernandez.

At the hearing of the House committee on legislative franchise last November 22, Fernandez said Meralco’s invitation to bid for a 1,800 MW power supply agreement (PSA) stipulated that only power plants in operation not earlier than January 22, 2020, are qualified to bid.

“Your invitation to bid was for 1,800 MW, your provision for your power supply agreement calls for 1,800 MW and if I may read, what you also said in that provision of your bidding — single or portfolio plant provided a power plant should be in commercial operation not earlier than January 22, 2020,” he said.

Fernandez said that this stipulation by Meralco automatically excluded many of the power plants that should be participating.

“You have said in your power supply agreement in the bidding, the power plants that have not started operations in January 2020 to May 2025, you can’t join, you are all excluded,” the lawmaker stressed.

“That is trademarking, that is branding. That’s tailor-fitting, that’s illegal in accordance with the PCC (Philippine Competition Commission) and international agreement which states that trademarking is prohibited, it does not allow ‘tailor-fitting’,” he said.

Fernandez also said that this tailor-fitting by Meralco has constricted the number of participants interested in bidding for the company’s 1,800 MW supply which was supposed to be sourced via “competitive selection process” (CSP).

“Your responsibility to us (is as) a distribution utility only. You have to get least cost,” Fernandez said. “How can you get least cost if many power plants are excluded?”

In accordance with CSP rules, Fernandez said that there are two types of duration – long and short term – in terms of power contracting.

Short-term contracts are to be given to existing power plants, while long-term ones are to be provided to new power plants, he added.

At the same hearing, ERC Chairperson Monalisa Dimalanta said Meralco was told to make sure it is not unduly limiting the number of potential bidders. She said a letter was already sent to Meralco stating the ERC’s observations on the published bid invite.

There are currently six potential bidders for the upcoming CSP. These are GNPower Dinginin, First NatGas Power, SP New Energy, Mariveles Power Generation, Excellent Energy Resources and Masinloc Power Partners.

As regulator of the power industry, Dimalanta said the ERC is mandated to promote competition, encourage market development, ensure customer choice and penalize abuse of market power in the industry.

Also at the hearing, a lawmaker said the TOR for the 1,800 MW supply bid favors certain power firms since the power plants that could join are those that should be in commercial operation not earlier than January 2020 but no later than May 2025.

“That is also our concern,” Dimalanta said at the hearing.

“We hope Meralco will be conscientious and not only think of profits,” said Caloocan 3rd District Rep. Dean Asistio.