Thursday, January 3, 2019

DoE clarifies competitive bidding rules



By JORDEENE B. LAGARE January 01, 2019

THE Department of Energy (DoE) has clarified certain guidelines for distribution utilities (DUs) seeking to secure power deals through competitive bidding.
In an advisory, the DoE said all power supply agreements (PSAs) should undergo the competitive selection process (CSP), as mandated by Department Circular DC2018-02-0003 issued in February 2018.
The particular provision calls for the creation of a five-member, third-party bids and awards committee (TPBAC) to oversee the CSP, with three of its members coming from the DU and the rest from customers not directly connected to the utility.
The TPBAC is comprised of a DU officer with a technical know-how in operating a utility, a DU officer/employee knowledgeable about any local or international CSP, a lawyer, a finance officer or accountant acquainted with electricity pricing, and a technical person or someone with experience on local or global competitive bidding. One of the last three shall represent the utility.
The DoE recognized that some franchise areas may not have enough available specified professionals. Hence, it allowed the inclusion of a registered captive customer with knowledge/experience in the fields of accounting, economics, finance, law, and engineering, as well as a customer who has an expertise in local or global competitive bidding scheme. The same applies to the composition of the joint TPBAC.
“This will ensure that the possible non-availability of the specified professionals shall not hamper the conduct of a CSP for the procurement of power supply. This is especially true with respect to off-grid areas in the country,” it said.
The DoE made the clarification in the circular introducing CSP in signing PSAs to foster competition and transparency and meet market demand at minimum cost. This calls for the compliance with the standard procurement procedures and documents in securing electricity for customers.

DOE expects new excise tax to reflect on fuel prices by mid-January

January 1, 2019 5:48pm By TED CORDERO, GMA News
https://www.gmanetwork.com/news/money/economy/680026/doe-expects-new-excise-tax-to-reflect-on-fuel-prices-by-mid-january/story/
The second round of higher excise taxes on petroleum products officially took effect on Tuesday, Jan.  1, 2019, but will be reflected by fuel prices by the middle of this month, the Department of Energy (DOE) said Tuesday.
Oil companies must first consume their 2018 inventory before applying the second tranche of fuel excise taxes on sales.
The Energy department estimated that the 2018 fuel stocks might last until mid-January, “depending on demand,” Energy Secretary Alfonso Cusi told GMA News Online.
Only then can the new excise tax rates be applied fuel sales.
The estimate is based on DOE’s requirement for oil companies to maintain a minimum inventory to cover 15 days of market demand.
“Excise tax will be applied only to new inventories. Oil companies have to sell their old stocks without the new excise tax,” Cusi emphasized.
The Tax Reform for Acceleration and inclusion (TRAIN) law imposed a P2.50 per liter excise tax on diesel, from zero, and hiked the levy on gasoline to P7.00 per liter on Jan. 1, 2018.
The measure was signed into law by President Rodrigo Duterte in December 2017.
Under the tax reform law, fuel excise taxes will go up by P2.00 per liter starting Jan. 1, 2019. This means that the excise tax on diesel will go up to P4.50 per liter and on gasoline to P9.00.
The DOE earlier reminded oil companies not to impose the second round of fuel excise taxes starting January 2019, particularly on petroleum stocks obtained in 2018.
The Energy department also warned violators face administrative penalties such as closure of the enterprise and criminal penalty of large scale estafa. —VDS, GMA News

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