Monday, September 23, 2019

2 electric coops’ bid rating method questioned


Published September 20, 2019, 7:04 PM By Danny Estacio

MARINDUQUE – Why is an academic system of rating students’ essays being used to determine the winners in bidding out big-ticket power contracts?
The question was posed by an electric consumer advocacy group to call the government’s attention to the new but highly questionable bidding method adopted by electric cooperatives that could lead to higher rates in off-grid missionary communities.
Aya Jallorina, executive director of Matuwid na Singil sa Kuryente Consumer Alliance (MSK) said the ‘’rubric’’ scoring system being used by two electric cooperatives in Palawan and Marinduque is highly subjective and arbitrary, and the preferred supplier an unfair edge.
The government must disallow such a bidding method, Jallorina said.
The MSK raised its concern in a letter addressed to Secretary Alfonso Cusi of the Department of Energy (DOE); Agnes Devanadera, chairperson of Energy Regulatory Commission (ERC); Arsenio Balisacan, chairman of Philippine Competition Commission (PCC), and Administrator Edgardo Masongsong of the National Electrification Administration (NEA).
The group said the rubric scoring system has been adopted by the Marinduque Electric Cooperative (Marelco) and the Palawan Electric Cooperative (Paleco) to determine the “lowest responsive bid” for power supply contracts.
The system is widely used in the academe, where students are graded for the quality of their work, like essays and other academic papers.
This allows teachers to evaluate the quality of the student’s work where quantitative scoring is not possible.
“We are concerned that the ‘rubric scoring’ is another bid mechanism to enable the [power distributor] to award to a preferred supplier and will discourage true competition,” MSK said.
It cited Marelco’s scoring system, which gives only a 50 percent weight to the bid price and 50 percent to qualitative and credential scoring.
The cooperatives resorted to bidding method after the energy department disallowed the previous favorite resort of electric coops — the Swiss Challenge or the unsolicited proposals, which triggered “more expensive power supply that has been bloating the missionary subsidies of these off-grid areas by billions of pesos every year,” MSK said.
“We don’t believe rubric scoring is appropriate for CSP (Competitive Selection Process) biddings where the true cost of generation that is contained in the financial bid is what is paid for by the government,” it added.
Another term of reference that will unduly raise missionary subsidies is the current ERC and DOE practice of allowing guaranteed capacity payments for baseload power supply contracts that has resulted in significant over-contracting of even inappropriate and onerous terms of power contracts, the group said.
This is why Paleco has power supplies of 80-MW to meet its 50-MW demand and is still experiencing outages, it said. Now it is again bidding for 20MW power supply to raise its contracted power to 100 MW, most of which will be guaranteed payments whether power is used or not.
“The old system of bidders minimum credential qualifications and definitive and verifiable specifications awarded 100 percent on straight comparable financial bids works and is more transparent and truly competitive,” MSK said.

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