A CONSUMER group has filed a petition before the Court of Appeals (CA) to stop a local electric cooperative from awarding a 15-year power supply contract to a firm which failed to meet the minimum two bidder requirement for such transactions.
The United Filipino Consumers and Commuters, Inc. (UFCC) through its president Rodolfo Javellana Jr. urged the CA to stop the implementation of the contract alleging it did not pass the Competitive Selection Process (CSP) and will prejudice all electricity end-users.
CSP is a form of public bidding that must be observed in the purchase of electricity by distribution utilities to ensure a fair, reasonable and cost-effective generation charge for consumers.
Javellana said a 15-MW, 15-year power supply contract awarded by Bantayan Island Electric Cooperative, Inc. (BANELCO) to Isla Norte Energy Corp. (INEC), also impleaded in this case together with ‘parent’ companies Vivant Integrated Diesel Corp. and GigaWatt Power Inc., did not meet the 2-bidder standard of CSP.
He cited DOE Circular DC2018-02-0003 which considers a bid failed when “competitive offers of prospective GenCos failed to meet the requirements prescribed in the bid documents.”
There must be more than one bidder for it to be CSP.
BANELCO had called for the CSP bid in July 2019 to replace its power supply contract expiring in November 2021 and two bidders qualified, Bantayan Island Power Corp. (BIPCOR) and the Vivant-GigaWatt consortium.
At the opening of bids on September 20, 2019, according to UFCC, BIPCOR was disqualified after its first envelope was declared non-compliant by the bids committee because an Equipment Supplier certificate was not notarized. BIPCOR is the sole power supplier of BANELCO whose contract expires next year.
After BIPCOR’s disqualification, the petition said, the consortium now represented by INEC “remained as the sole participant as there was no other bidder sanctioned to compete”, inevitably leading to INEC’s getting the award now sought by UFCC to be restrained by the CA.
Citing a recent Supreme Court decision that upheld CSP as mandatory for all power supply procurements, Javellana said the requirement is primarily aimed at ensuring a fair, reasonable and least-cost generation charge to consumers under a transparent power sale mechanism between the generation companies and the distribution utilities.
When a bid is pursued with only one offer on the table as is the case now, how can that be competitive, Javellana asked. How do we determine least cost with only one bidder, he added.
Named nominal respondents were the Department of Energy, Energy Regulatory Commission, National Electrification Administration and National Power Corp.
Javellana explained the agencies were named in the petition because they are the lead implementing arms and institutions in the implementation of CSP.
He noted that under the DOE circular, all these agencies, except ERC, are observers in every conduct of the CSP.