Stricter rules sought on CSP for power supply agreements
The Department of Energy (DOE) is being urged to enforce stricter rules in the competitive selection process (CSP) for power supply agreements (PSAs) that are being auctioned by distribution utilities.
The Department of Energy (DOE) is being urged to enforce stricter rules in the competitive selection process (CSP) for power supply agreements (PSAs) that are being auctioned by distribution utilities.
That came forth after one of the reported disqualified bidders in the CSP of power utility giant Manila Electric Company (Meralco) is not in the list of the ‘indicative projects’ for coal-fired power facilities.
It has to be noted that in the ‘coal moratorium’ declaration of the DOE in October last year, it was specifically laid down that it will no longer accept new project-applications for such technology installation.
But it is an emerging guessing game in the industry if the DOE will allow the participation of Kingstone Energy in the CSP of Meralco, given that its planned development is considerably a new application and it is nowhere in the “indicative” and “committed” list of DOE projects. The company does not have known track record on power plant development also.
The bidder, which has been identified as a Chinese firm, was disqualified in the CSP based on its technical proposal, but it has reportedly lodged a motion for reconsideration with Meralco’s third party bids and awards committee (TPBAC).
When asked on the matter, energy officials said they are still counterchecking the database of projects with existing applications, primarily those that have already been endorsed by the DOE for implementation.
In a statement to the media, Infrawatch PH Convenor Terry Ridon asserted that “while the CSP has been proven as a viable and transparent process to ensure ‘least cost’ to electricity consumers, the DOE should implement stricter rules to ensure that bidders have proven local track record and pose no national security risks.”
At the very least, the former lawmaker noted the new CSP rules “should thoroughly vet the track record of bidders of future power suppliers.”
Ridon emphasized that in the recent pre-qualification process of Meralco’s CSP, “all bidders, except one, are familiar names in the power industry. These firms have already been generating power for various distribution utilities in the country even prior to the current 1,800-megawatt Meralco bid. The same cannot be said for one bidder, Kingstone Energy.”
Ridon thus stressed “a proven track record in the local power sector should be indispensable in CSP bidding, as it boosts the integrity of the entire bidding process, and raises consumer confidence on the viability of future power supply.”
He added the 1,800MW PSA bidding of the country’s biggest power distribution firm “is no small matter to be left to companies without a local track record, as this constitutes almost 20-percent of Luzon island’s 2020 peak power demand of 10,570 megawatts.”
The former solon further pointed out “Kingstone’s disqualification reflected its failure to grasp local rules and regulations, specifically President Rodrigo Duterte’s pronouncement banning new coal-fired power plants during his term.”