DOE modifies policy on CSP power supply contracting

By Myrna M. Velasco – February 16, 2018, 10:01 PM
from Manila Bulletin

The Department of Energy (DOE) has modified the policy on competitive selection process (CSP) of power supply contracting being enforced upon distribution utilities (DUs) in the country.

While power utilities can previously undertake CSP processes on their preference, the energy department is changing that policy tack via mandated creation of an independent five-man third party bids and awards committee (TPBAC) that will then manage the CSP supply procurements of DUs; or having a third party auctioneer.

As culled from the provisions of the newly issued Department Circular 2018-02-0003 of the DOE, it was stipulated that the TPBAC “shall spearhead and manage the CSP,” and must also “be accountable to its decision in the conduct of the CSP.”

The composition of the TPBAC shall comprise of three members that shall be coming from the DU, and the two members “will come from the captive customers that are not directly or indirectly related/affiliated to the DU.”

Captive customers would refer to the segment of end-users who cannot exercise yet their freedom of choice when it comes to contracting directly with their preferred retail power suppliers.

In lieu of a TPBAC, the DOE Circular sets an option of having a third party auctioneer (TPA) when DUs will undertake CSPs on their power supply purchasing.

As specified in the DOE Circular, “the TPA shall be a team of private individuals or a private corporation duly recognized in the Philippines with experience in competitive bidding and with sufficient knowledge in the electric power industry.”

It has been emphasized that “the TPA is not in any way connected to any electric power industry players.”

It was indicated though that “the TPA shall have representation from the consumers as provided for in the policy.”

Relative to the TPA, the department is seeking the imprimatur of the Energy Regulatory Commission (ERC) “to provide the guidelines for accreditation,” at least within 60 days from the effectivity of the modified CSP policy. Under general terms, the DUs being mandated to conduct CSP-underpinned power supply sourcing shall lay down the following data and information on their procurement plan: historical data on peak demand, supply contract, energy sales and energy purchase.

Additionally, they must correspondingly provide 10-year monthly peak demand forecast; energy sales as well as existing contracts, including their expiration dates.

The DUs must also give details on their committed energy and demand for CSP; as well as their current supply-demand status.