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Energy green group bats for open and transparent power supply bidding rules

/ 04:18 PM November 12, 2019

MANILA, Philippines — The Institute for Climate and Sustainable Cities (ICSC) has expressed support for the Department of Energy’s (DOE) call for Meralco to open the competitive selection process (CSP) to give more flexibility for power suppliers bidding for its energy needs.

“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-megawatt power supply agreement (PSA),” said Atty. Pedro H. Maniego Jr., senior policy advisor of ICSC.

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Maniego, former chair of the National Renewable Energy Board and of the UP Engineering Research & Development Foundation, said DOE’s proposal to divide the Meralco supply requirement up for bidding into smaller sizes and to allow stacking of bids will likewise foster the desired competitive structure envisioned in EPIRA, or the Electric Power Industry Reform Act of 2001.

The DOE is set to issue new rules on the competitive selection process to govern power firms that are engaged in both power generation and distribution.

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This proposal was raised by Energy Secretary Alfonso Cusi as the rebidding of the 1,200-megawatt greenfield power supply requirement of Meralco remained unresolved.

Cusi has provided inputs to Meralco on how the contract should be bidded out. But Meralco has insisted on its own terms of reference.

“Secretary Cusi’s instruction, once applied on all competitive selection processes, 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 supply agreement,” Maniego said.

“The issue transcends Meralco’s CSP rules, since the impact is long term and could cover a generation of Filipinos. Not only Meralco but all of the country’s 16 privately-owned distribution utilities as well as all 119 electric cooperatives, should allow both existing and new power plants of all sizes to join the bidding of their power requirements in order to get the least cost of electricity,” he added. At the same time, the ICSC pushed for the inclusion of renewable energy sources in the power distributor’s energy mix.

“This open and transparent approach of bidding through the CSP will provide not only the big generation companies, but also small renewable energy firms the opportunity to bid for portions of the power requirements of the distribution utilities,” Maniego said.

“Consumers will benefit from the participation of the RE companies, because electricity costs from RE sources continue to fall, as evidenced by historical data and studies,” he added. “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.”

Right now, the Philippines imports approximately 75 percent of its coal requirements. While fossil fuel prices are subject to fluctuations in the world market and tend to go up over the long term, RE sources utilize indigenous resources and/or consume no fuel.

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“In deciding for the best alternative for a secure, stable and affordable energy future for our country, let us afford the highest importance to sustainable development and mitigating climate change,” Maniego said.

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TAGS: Business, competitive selection process, Department of Energy, Meralco, power sector, power supply deals
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