THE Energy Regulatory Commission has cautioned the Manila Electric Company (Meralco) not to engage in anti-competitive practices, particularly in the conduct of an ongoing competitive selection process (CSP) for 1800-megawatt (MW) baseload capacity.
During the hearing of the House Committee on Legislative Franchises last week, 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 had been sent to Meralco stating the ERC’s observations on the published bid invite.
There are currently six potential bidders for the upcoming CSP — GNPower Dinginin (GNPD), First NatGas Power, SP New Energy, Mariveles Power Generation, Excellent Energy Resources and Masinloc Power Partners.
As the 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.
During the hearing, Rep. Dan Fernandez lamented that the terms of reference for the CSP allegedly favors certain power firms since the power plants that could join the auction are those that have been in commercial operation not earlier than January 2020 but no later than May 2025.
Lawmakers led by Fernandez urged the ERC to act on what they said were irregular terms set by Meralco for 1,800 MW of electric supply that it was to bid out but apparently to the companies tailor-fitted to the utility’s conditions.
Fernandez said ERC should stop Meralco from proceeding with the bidding until a review and study of its terms of reference (TOR) are completed.
Fernandez said a close examination of the TOR would show these are anti-competitive and discriminatory.
Fernandez had earlier urged Congress to split the mega-franchise of Meralco into three.
“It’s high time we renew its franchise to pave the way for the split of the mega-franchise we granted Meralco,” said Fernandez.
Joe Zaldarriaga, Meralco vice president and head of Corporate Communications, said the firm is fully compliant with all government regulations and even outperformed the level of service required by the regulator.
“Further, while Meralco is the largest utility in the country, it has never committed and has no record of any anti-competitive behavior or abuse of market power. On the contrary, we have always managed to supply electricity to our customers in the most transparent and least cost manner,” said Zaldarriaga.
