The country’s electric cooperatives (ECs) are prodded to undertake their competitive selection process (CSP) on power supply agreements (PSAs) to guarantee that they will not suffer supply shortages in the immediate term, especially with the portended economic recovery post-pandemic.
To ensure that power supply auctions are carried out in a timely manner, National Electrification Administration (NEA) Chief Edgardo R. Masongsong has issued Memorandum No. 2019-035, so the ECs can be reminded and guided on their power supply procurements.
In particular, it was decreed by the NEA Administrator that the ECs with expiring PSAs in three (3) to five (5) years may already start the conduct of CSPs “to ensure (their) continuous and sufficient power supply.”
Under the CSP policy of the government, distribution utilities – which shall include the ECs, will need to bid out their PSA solicitations, so they can corner the ‘least cost’ that they will pass on to their customers.
NEA emphasized that through tendering process, power supply contracting can be assured that these are done with “transparency, fair competition and full public accountability.”
The electrification agency has supervisory powers over the 121 ECs in the country, hence, it is the entity reminding them on their obligation to contract for ample capacity on supply portfolio that they will need to serve captive customers or those end-users that still cannot exercise their power of choice under the ambit of Retail Competition and Open Access (RCOA) in the restructured power sector – and these are mainly residential customers.
“The timely conduct of CSP in procuring power supply is currently being proposed before the NEA Board of Administrators to be included in the overall performance assessment of ECs nationwide,” NEA stressed.
CSP activities, for private DUs as well as ECs, are administered by third party bids and awards committee (TPBAC); and the auction process itself is physically observed by representatives of the Department of Energy.
And when the winning bids are affirmed in post-qualification process and the PSAs signed, these supply contracts will still need to go through the warranted approval of the Energy Regulatory Commission. Supply procurements are often anchored, not just on immediate power needs of the DUs and ECs, but also their long-term requirements based on the Distribution Development Plan that they are submitting to the energy department.