ERC concedes on Swiss challenge ‘exceptions’

By Myrna M. Velasco – August 5, 2018, 10:00 PM
from Manila Bulletin

The Energy Regulatory Commission (ERC) has conceded to the prescribed set of rules of the Department of Energy (DOE) on “exceptional conditions” when Swiss challenge can be invoked on the power supply contracting of the distribution utilities.

Agnes T. Devanadera

                 Agnes T. Devanadera

ERC Chairperson Agnes T. Devanadera told media that the two agencies have “agreed” on the parameters as to when Swiss challenge can be accepted as an “auction scheme” under the Competitive Selection Process (CSP) of underwriting power supply agreements (PSAs) by the power utilities.

“In so far as the ERC is concerned, we have always recognized Swiss challenge… insofar as DOE is concerned, we have both opened up, and in fact in principle, we have agreed on the differences in our rules,” Devanadera said.

She emphasized that the two agencies already had “meeting of the minds” when it comes to the policy’s application.

“We’re just drafting the refinements for our rules… there are just two more issues that we’re trying to refine. There’s no conflict anymore,” the ERC chief said.

According to Energy Undersecretary Felix William B. Fuentebella, the parties already consented to the scope as to when Swiss challenge can be accepted as an option under the CSP.

These parameters, he said, shall include projects covered by grants or donations; emergency procurements; provision of power supply to off-grid areas primarily by government-owned and controlled corporations; and provision of power supply through bilateral deals with state-run Power Sector Assets and Liabilities Management Corporation.

Swiss challenge is a procurement process, wherein a particular agency or entity receives an unsolicited proposal, and opts to subject it to a matching tender by a third party.

The energy official qualified that these Swiss challenge applications are provided under Section 2 of the CSP guidelines institutionalized by the DOE.

Other than these circumstances, all power supply agreements to be underwritten by distribution utilities or DUs for their captive customers (generally the residential end-users) shall go through a comprehensive bidding process.

Another matter that the DOE has been sorting out with the ERC is on the representation of consumer group in the third party bids and awards committee (TPBAC) on the CSP processes to be undertaken by DUs.

Fuentebella noted this concern is similarly being discussed with affected stakeholders, primarily the criteria of selection of the consumer group’s representative in the CSP-supervising body.

The CSP is a bidding process prescribed to DUs in their procurement of power supply so it can be ensured that the electricity they will purchase will be the cheapest for the end-users’ electric bills.