DoE turns down offers of private firms

The Department of Energy (DoE)is shunning all offers from the private sector, including one from conglomerate San Miguel Corp., to put together all the necessary systems and IT infrastructure that will allow the government to start implementing the much-awaited open-access scheme this coming September.

Energy Secretary Jose Rene D. Almendras explained that this was meant to ensure the integrity of the open access and retail competition mechanisms, as well as to prevent any group from possibly gaining a competitive edge.

“It is better if the government does it because I do not want any questions in the future. In the (wholesale electricity) spot market alone, there is already contention between suppliers and buyers, and that’s only 80 participants. With the open-access scheme, you bring in 800 more. So I want the infrastructure, the system, the process and the procedures to be so unquestionable as far as integrity is concerned. Otherwise, all we’re going to be doing is just reconciling issues between buyer and seller,” Almendras explained.

The energy chief further clarified that while interests have been expressed, the government has not received any formal offers from any company to pay for the infrastructure. He, however, stressed that the government was not waiting nor expecting such offers since it already had the funds for it.

“There’s no need (for help from the private sector on this one). We already approved funding at the Cabinet level. It’s not a big amount—it’s something we can afford to pay for,” Almendras said.

Industry sources earlier confirmed that San Miguel has offered to help the government put up the infrastructure to start off open access by the third quarter.

According to Almendras, the government will soon bid out to interested software companies the provision and installation of the infrastructure that will allow for the smooth operation of the B2B and the accounting, billing and settlement systems, which are crucial in ensuring the success of the open-access and retail competition scheme.

Apart from these systems, there is also a need to ensure that Philippine Electricity Market Corp. (PEMC), which currently operates the wholesale electricity spot markets in Luzon and the Visayas, will already be an “independent market operator” to avoid questions or concerns regarding transparency and objectivity in operations.

Almendras said that PEMC was tapped to be the central registration body, which included the task of being the settlement agent.

Last year, Almendras had said that the government was eyeing the Philippine Stock Exchange (PSE) to become the settlement agent that will be responsible for the transaction, settlement and reconciliation system. Effectively, the settlement agent will handle the operations of the market under the open-access regime. However, the PSE is not capable of carrying out these tasks as the system or the hourly reckoning will be too heavy for them, according to Almendras.

The energy chief assured all concerned stakeholders that the government was on track of its target to implement the open-access scheme by September this year, given the activities being carried out according to the timeline.

Under the open-access regime, large power users will be able to choose their own electricity suppliers, unlike under the current system where they are limited to the supplier that has jurisdiction over their respective areas. This scheme is expected to further spur competition among power stakeholders, resulting in better, more competitive electricity prices.