Consumer group asks Court of Appeals to stop power supply deal in Bantayan Island

posted December 09, 2020 at 08:30 pm by Manila Standard Business
https://manilastandard.net/business/power-technology/341642/consumer-group-asks-court-of-appeals-to-stop-power-supply-deal-in-bantayan-island.html

The United Filipino Consumers and Commuters Inc. said Wednesday it asked the Court of Appeals to stop the implementation of a power supply contract in Bantayan Island, claiming that did not pass the government’s competitive selection process.

UFCC president Rodolfo Javellana Jr. said CSP as a form of public bidding should have been observed in the purchase of electricity by distribution utilities to ensure a fair, reasonable and cost-effective generation charge for consumers.

Javellana said a 15-megawatt, 15-year power supply contract awarded by Bantayan Island Electric Cooperative Inc. to Isla Norte Energy Corp., along with ‘parent’ companies Vivant Integrated Diesel Corp. and GigaWatt Power Inc., did not meet the two-bidder standard of CSP.

Javellana said DOE Circular DC2018-02-0003 considers a bid failed when “competitive offers of prospective gencos [generation companies] failed to meet the requirements prescribed in the bid documents.”

He said this means that there should be more than one bidder for it to qualify as a CSP.

BANELCO called for the CSP bid in July 2019 to replace its power supply contract expiring in November 2021 and two bidders qualified—Bantayan Island Power Corp. and the Vivant-GigaWatt consortium. Conducted under a two-envelope format, the first envelope consisted of the technical proposal and the second, the financial or price offer.

Javellana said at the opening of bids on Sept. 20, 2019, BIPCOR was disqualified after its first envelope was declared non-compliant by the bid committee because an equipment supplier certificate was not notarized. BIPCOR is the sole power supplier of BANELCO whose contract expires next year.

The petition said after BIPCOR’s disqualification, the consortium now represented by INEC “remained as the sole participant as there was no other bidder sanctioned to compete,” inevitably leading to INEC’s getting the award now sought by UFCC to be restrained by the CA.

Javellana, citing a recent Supreme Court decision that upheld CSP as mandatory for all power supply procurements, said the requirement was primarily aimed at ensuring a fair, reasonable and least-cost generation charge to consumers under a transparent power sale mechanism between the generation companies and the distribution utilities.

He said that when a bid is pursued with only one offer on the table “how can that be competitive” and “how do we determine the least cost with only one bidder?”

“We have headlined the Department of Energy, Energy Regulatory Commission, National Electrification Administration and National Power Corp. in our petition because they are the lead implementing arms and institutions in the implementation of CSP. When something like this BANELCO award to INEC happens under the nose and within sight of these agencies without any challenge, the consumers are in big trouble,” Javellana said.

He said that under the DOE circular, all these agencies, except ERC, are observers in every conduct of the CSP.