Published
By Myrna M. Velasco
https://business.mb.com.ph/2019/01/04/doe-alters-consumer-representation-in-csp-contracting-for-dus/
The Department of
Energy (DOE) has modified the representation of a “consumer intermediary” in
the third party bids and awards committee (TPBAC) relative to the conduct of
competitive selection process (CSP) on power supply contracting of the
distribution utilities (DUs).
The department
qualified that it changed the specification for a consumer representative
because of “the possible non-availability of the specified professionals,”
which in the process may hamper the conduct of a CSP on the power utilities’
procurement of power supply.
It stressed that such
dilemma will likely transpire especially in the conduct of competitive bidding
on supply contracting of power utilities serving the off-grid areas.
That as a given, the DOE thus liberalized the selection of a contingent from
the consumer-segment – essentially prescribing that the representative shall be
a “captive customer preferably with knowledge/experience in the fields of
accounting, economics, finance, law and engineering.”
The other requirement
will be for that consumer-representative to have knowledge and experience in
competitive public bidding.
The propounded TPBAC
for the CSP process of DUs will comprise of five representatives including a lawyer;
a finance officer or an accountant; two officers of the concerned DU and one DU
officer or employee knowledgeable in procurement rules, including international
competitive bidding procedures.
The mandate on CSP is
anchored on intent of requiring the DUs – including giant players like the
Manila Electric Company (Meralco), “to procure least cost electricity supply”
for their captive customers.
Captive customers are those segment of end-users – chiefly residential and
marginal commercial end-users – that cannot exercise yet their power of choice
on their electricity supply – thus, they will need to remain under the service
provision of their franchised distribution utilities.
As decreed by the DOE,
the CSP shall provide “a clear, transparent and fair supply procurement process
that will promote competition and greater private sector participation in the
provision of adequate generation capacity to meet the demand in the captive
market.”
The CSP Circular issued
by the DOE further set out the parameters on when Swiss challenge shall be
accepted as a ‘competitive bidding paradigm’; and when emergency procurement of
supply shall be exercised by specified distribution firms.
As defined, an
“emergency power” shall refer to the power supply required by a DU in the event
that its actual electricity supply “falls below its load demand due to force
majeure and fortuitous events or other analogous circumstances that are beyond
the control of the DU and such shortfall cannot be addressed through any
reasonable means within a month.”
The energy department qualified though that such declaration of “emergency in
supply procurement” be subject to its final determination.
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