Published July 26, 2019, 10:00 PM By Myrna M.
Velasco
Power utility giant Manila Electric
Company (Meralco) has already formed the five-man third party bids and awards
committee (TPBAC) that will carry out the competitive selection process (CSP)
for its targeted 2,900 megawatts of power supply procurements, according to
company President Ray C. Espinosa.
The third party CSP body for its
targeted power supply agreements (PSAs) will be chaired by lawyer Ferdinand A.
Domingo, an expert in local and international procurements and he will be representing
the consumer group being a captive subscriber of Meralco. Another consumer
representative is lawyer and former Trade and Industry Undersecretary Adrian S.
Cristobal Jr.
The distribution utility
representatives in the TPBAC are Engineer Froilan J. Savet, head of Network
Planning and Project Management of Meralco; Bennette D. Bachoco, head of
Financial Planning and Reporting and General Controllership of the company; and
then Maria Luisa V. Alvendia, first vice president and supply chain advisor of the
utility firm who has more than 25 years of experience in procurement across
industries such as in automotive, telecommunications, information technology
and business process outsourcing (BPO) businesses in Asia and North America.
As instituted in the Department of
Energy (DOE) policy, the distribution utilities (DUs) are required to set up a
“third party bids and awards committee” to spearhead and manage their
respective CSP processes. That third party CSP body shall comprise of five
members – three of whom shall come from the concerned DU; and two members shall
be from the league of captive customers “that are not directly or indirectly
related/affiliated to the DU.”
Espinosa noted that of the 2,900MW
scheduled supply procurements; the greenfield capacity of 1,200MW shall just be
from one project; while for the brownfield procurement for baseload capacity,
the minimum offer from power suppliers or generation companies shall be at 200
megawatts.
For the mid-merit capacity auction,
the Meralco chief executive emphasized that the minimum capacity offer shall be
at 100MW – and the total procurement for this supply portfolio shall be at
500MW.
The DOE has already indicated that
it will strictly monitor and will also participate as “observer” in the CSP on
the power supply procurements of the private distribution utilities and the
electric cooperatives.
“The DOE monitors the CSP being
conducted and it also participates as observer in the CSP activities of the DUs
from the pre-bid conference up to the issuance of the notice-to-proceed,”
Energy Secretary Alfonso G. Cusi said.
It has to be noted that in the
Supreme Court decision, it was the 2018 CSP Circular of the DOE that had been
mandated as the guiding rule in the conduct of competitive auction on supply
procurements of the power utilities.
Cusi stressed “the strict implementation
of the CSP policy, which was mentioned in the Supreme Court decision, is
anchored on the principles of transparency and consumer welfare promotion,
hence, the DOE will continue to monitor how all the DUs comply with the
policy.”
In Meralco’s case, it initially set
out three batches of CSP bid notices for procurements of up to 2,900 megawatts
of capacity that will beef up its supply portfolio in the current period as
well as for its future requirements.
On the utility firm’s Power Supply
Procurement Plan (PSPP) submission, the energy department indicated that such
had been verified to be in accordance with the Distribution Development Plan
(DDP), which is the blueprint for project developments and network
reinforcements cast for the distribution segment of the industry.
“Meralco submitted its PSPP to the
DOE and the DOE ensures its consistency with the DDP,” the energy chief said.
Fundamentally, the PSPP fleshes out the required supply procurement of DUs
based on their forecasted demand growths within a specified timeframe. In
Meralco’s case, it submitted 10-year demand growth forecasts for its captive
customers – chiefly residential end-users; and then the commercial and
industrial customers which may still opt to remain under its service domain
given the voluntary frame of power retail competition in the country.
“The DOE, based on the DDP and the
PSPP, recommended to increase the megawatts to be procured,” Cusi said;
qualifying further that “the recommendation is also anchored on the need to
encourage the build-up of more plants to supply the projected increase in the
demand for the country’s growing economy.”
The CSP decree on supply
procurements will now be a permanent policy fixture for all private
distribution utilities and the electric cooperatives – with this edict aiming
to corner the “lowest price” and the “best service” that supplying generation
companies can offer to the consumers.
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