AC Energy favors competition in awarding power supply contracts

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AC Energy Holdings Inc., the energy arm of Ayala Corp., is supporting the competitive selection process (CSP) in securing power supply agreements (PSAs).

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The CSP being implemented by the Department of Energy (DOE) is in fact similar to the intention of the private-public partnership (PPP) scheme of the government, said John Eric Francia, AC Energy president and CEO.

“We are obviously in favor of CSP and we don’t see any difference from what’s happening in the PPP, which has been arguably successful in terms of getting the best deal for the people,” Francia told reporters over the weekend.

Francia noted there is nothing wrong with the CSP as long as it is structured and ran properly, transparently and professionally.

He, however, noted that is going to be a slower implementation of contracts.

“No doubt, the downside of that ̶ learning from the PPP ̶ is that it the contracts would come slower because you have to make sure that there are no loopholes, it is fair, it is transparent and proper,” he said.

Francia’s statement contradicts the position of power distributor Manila Electric Co. (Meralco), which is pushing for a voluntary implementation of CSP in securing power supply agreements.

Meralco President Oscar Reyes earlier said that the intended benefits of the CSP will be maximized if its implementation on voluntary basis.

The Department of Energy (DOE) has issued a circular that mandates all distribution utilities to produce PSAs only through a competitive selection process to ensure the reliability, quality and security of power supply. The landmark circular aims to ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability or the Demand Aggregation and Supply Auctioning Policy (DASAP) in the power industry.

The DOE mandated a higher level of transparency in the procurement process by promoting competition in the procurement and supply of electric power to all consumers.

The DOE reiterated the government’s policy, saying that all distribution utilities (DUs) must recognize and assume full responsibility to forecast, assure and contract supply within their respective franchise areas to meet their obligations particularly to their captive market.

“The uncontracted energy requirements of DUs provide the window of opportunity for the existing and prospective private investors to contract these out and invest in additional power generation capacities, both conventional and renewable energy (RE),” the department said.

According to the DOE, adequate and proper power supply contracting through a transparent procedure ensures the demand is met and the consumers are protected from the volatile prices in the Wholesale Electricity Spot Market.

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