DOE defends Meralco on 3rd party bid committee’s selection for CSP

By Myrna M. Velasco – August 31, 2019, 10:00 PM
from Manila Bulletin

The Department of Energy (DOE) has defended the selection of the five-man third party bids and awards committee (TPBAC) that will manage the competitive selection process (CSP) for the three-track power supply agreements (PSAs) that the Manila Electric Company (Meralco) is soliciting from power generators and suppliers.

Department of Energy (DOE) logo

Department of Energy (DOE) logo

On questions raised by Bayan Muna Representative Carlos Isagani Zarate as to why the distribution utilities (DUs), like Meralco, still have control on the formation of the TPBAC, Energy Undersecretary Felix William Fuentebella indicated that the department exercised due diligence on the selection process for the composition of the bid committee – especially those that will be taking consumer representation in the body.

“The process of selecting the consumer representatives was approved by the DOE (Department of Energy),” he said, with specific reference to the questioned TPBAC for Meralco’s PSA auctions slated this September.

“We make sure that they (consumer representatives) are not hao xiao (ineligible or ridiculous individuals) and to avoid that the DU will just be manipulating the process,” Fuentebella said.

He explained that the inclusion of two-consumer representatives in the CSP of Meralco will ensure the degree of transparency that the DOE would want to come out from the process – because there are “independent eyes” sitting in the auction body – aside from the observer status that the DOE will be taking during the bidding exercise.

The two consumer-representatives in the Meralco supply auction are Atty Ferdinand A. Domingo, who will also sit as the TPBAC’s chairman; and Atty Adrian S. Cristobal, former secretary of the Department of Trade and Industry.

Meralco will successively conduct PSA auctions on September 9, 1 0 and 11 for 2,900 megawatts of capacity to meet its supply needs for baseload, mid-range and peaking as well as greenfield capacity that shall be set on stream by year 2024.

The baseload capacity auction will be for 1,200 megawatts and to be offered at a block for 200MW each; the mid-merit capacity will be for a block of 100MW capacity each; while the greenfield project shall be at 1,200MW with specific high efficiency, low emissions (HELE) technology deployment.

Energy Secretary Alfonso G. Cusi similarly noted that in the CSP Circular issued by the DOE, “we made sure that it is fair and consumers are protected.”

It has to be noted that in the ruling of the Supreme Court upholding the conduct of CSP for all PSAs or supply procurement of the DUs, it has been the DOE Circular that was prescribed as the guiding policy for the industry.