Danessa Rivera (The Philippine Star)
- November 12, 2019 - 12:00am
MANILA, Philippines — The Department
of Energy (DOE) will come out with a standard template for power distributors
to conduct competitive biddings to avoid issues and ensure the least cost of
electricity.
DOE Secretary Alfonso Cusi said the
agency is currently working on a competitive selection process (CSP) template
to be followed by all distribution utilities (DUs) and electric cooperatives
(ECs).
This stemmed from Manila Electric
Co. (Meralco)’s plan to proceed with its second round of its CSP for
1,200-megawatt (MW) greenfield capacity without changing the terms of reference
(TOR) suggested by the DOE.
“They are a private entity and we
have our CSP rules. So to avoid these problems, we are coming up with a CSP
template,” Cusi said.
“I wanted the Meralco CSP to be open
because they are the DU and at the same time owner of the generation plant,” he
said.
Among the DOE’s suggestions is to
allow all power plants to participate in the bidding, and allow plants to
contract or sell only a part of its capacity to the DU.
The suggestions were made after the
CSP for the 1,200-MW greenfield capacity was declared a failed bidding as only
Atimonan One Energy Inc. (A1E), a unit of Meralco Powergen Corp. (MGen),
submitted its offer.
The energy chief said Meralco could
proceed with its competitive bidding as the CSP template being drafted by the
DOE would be prospective.
“I don’t need to approve it if they
want to publish it, they can do it as long as they say that their CSP is not
approved by DOE,” Cusi said.
The Power for People Coalition (P4P)
expressed support for the DOE’s call for Meralco to change its rules to give
more flexibility for power suppliers bidding for its energy needs, while at the
same time pushing for the inclusion of renewable energy (RE) sources in the
power distributor’s energy mix.
“We welcome the announcement of
Secretary Cusi calling on Meralco to change its terms of reference for its CSP.
However, we are not happy that the changes he asks for will just allow more
coal-fired power plants to participate, instead of taking the opportunity to
obey President Duterte’s directive to have more renewable sources available to
Filipinos,” said P4P convenor Gerry Arances.
Meanwhile, the Institute for Climate
and Sustainable Cities (ICSC) said the open and transparent bidding for power
supply contracts should be followed not only by Meralco, but also by all other
DUs and ECs to ensure Filipinos affordable and reliable electricity.
In a statement, ICSC senior policy
advisor Pedro Maniego said allowing both existing and new power plants of all
sizes to join the bidding of power requirements allows getting the least cost
of electricity for consumers.
“This open and transparent approach
of bidding through the CSP will provide not only the big generation companies
(gencos), but also small RE firms the opportunity to bid for portions of the
power requirements of the distribution utilities,” he said.
This echoes Sen. Sherwin
Gatchalian’s call on the need for an open and transparent bidding in Meralco’s
CSP in line with the policy under the Electric Power Industry Reform Act
(EPIRA).
The EPIRA calls for transparent and
reasonable prices of electricity in a regime of free and fair competition and
full public accountability.
“In adherence to the prescribed
spirit of free and fair competition, both existing and new power plants should
be allowed to join Meralco’s upcoming bidding for a 1,200 MW power supply
agreement (PSA),” Maniego said.
The official said consumers would
benefit from the participation of the RE companies, because electricity costs
from RE sources continue to fall.
“RE companies’ participation in the
bidding, if allowed and successful, will reduce the country’s dependence on
power plants that run on traditional and carbon-intensive fossil fuels, such as
coal,” Maniego said.
Currently, the Philippines imports
approximately 75 percent of its coal requirements.
Maniego, who is also the former
chairman of National Renewable Energy Board, also pushed for the division of
Meralco’s supply requirement into smaller sizes and to allow stacking of bids,
as proposed by Cusi.
This, he said, would likewise foster
the desired competitive structure envisioned in EPIRA.
“Secretary Cusi’s instruction, once
applied on all CSP, would give small power generation companies an opportunity
to bid and win portions of large supply requirements. Without stacking, only
one bidder and one price for the entire capacity will win, which would exclude
small RE companies that can offer less expensive electricity at firm prices
over the life of the
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