A CONSUMER group supports the Department of Energy’s (DOE) proposal to tap a third party in the conduct of power tenders under the mandatory competitive selection process (CSP).
According to the Matuwid na Singil sa Kuryente (MSK) Alliance, having a third party in the would assure the integrity of the bidding process in the procurement of power supply.
“Only an independent third party can assure the integrity of the bidding process, an essential element of a successful CSP,” the group said in a statement.
The Department of Energy (DOE) is now drafting guidelines for the aggregation and third party provisions in the CSP.
The Energy Regulatory Commission (ERC) had earlier approved the implementation of the CSP in the procurement of power supply by distribution utilities (DUs) for their captive markets.
The ERC maintained that the CSP will lend transparency to the manner by which DUs buy electricity from power generators.
MSK also pointed out that independent bidders may no longer participate in a CSP on the grounds that it “costs a lot of effort and money to prepare a serious bid,” but that they may join a bidding if there is a third party.
“They will do so only if there is an assurance that they have a fair chance to win and be awarded,” the group said.
The consumer advocacy group also stressed that even the Swiss challenge method of bidding should not be allowed because no one bothers to prepare a bid only for it to be beaten by the “original proponent.”
Under the CSP, a DU may execute a power supply agreement (PSA) with a generation company only after successfully complying with the requirements of the process.
The requirement is for a DU to openly call for and receive at least two qualified bids from generation companies. The DU is not barred from entering into a contract for power supply.
The CSP further requires that direct negotiations with other power suppliers be entered into only after at least two failed CSPs.
With the implementation of the CSP, the ERC will no longer allow the filing by DUs of applications for PSA approval without compliance with the CSP requirements.
The CSP also requires the selection of a third party in the sale of electricity by generation companies.