Counterpoint: BIPCOR belies Bantayan Electric’s claims

By Manila Standard Business – July 19, 2020 at 09:30 pm

Bantayan Island Power Corp. described as baseless and irrelevant the statement of Bantayan Island Electric Cooperative general manager Lee Rivera on the exclusion of the power supplier from the competitive selection process conducted last year.

“The allegations and claims of Mr. Rivera are irrelevant, baseless, misdirected, misplaced and mostly self-serving,” BIPCOR director Fichte Peñaloza said in a statement.

BIPCOR is the current supplier of Banelco, which awarded the new supply contract covering the period November 2021 to November 2016 to another group.

BIPCOR questioned the results of the CSP. “On the matter of relevance, the claim of Mr. Rivera that our ‘constant engine failure’ is the reason for the summary disqualification of our bid reveals how Banelco is now clutching at straws to justify its actions in ignoring the Department of Energy guidelines on CSP. Nowhere in the CSP terms of reference prepared and published by the third-party bids and awards committee is constant engine failure mentioned nor was it even raised in the pre-bid conferences. If it was, we would have defended our record, as we do now,” Peñaloza.

The company also denied there was a shortage of supply in Bantayan Island. “On the factual bases of Mr. Rivera’s claims that a ‘daily rotational brownout is due to a shortage of power supply’, attached is our letter on July 15, 2020 to Banelco president Oscar Seares affirming in verifiable data our compliance with our contractual obligations to Banelco,” Peñaloza said.

“We consistently posted an availability factor of 99 percent or in that range and we posted surpluses even at peak demand. For the record, Bipcor’s annual availability and actual generated net energy delivered to Banelco stands at an average of 99.6 percent and 41, 361, 671 kWh, respectively, exceeding our contractual guarantees of 85 percent and 37,500,000 kWh, respectively,” he said.

“Outages and load shedding happen in varying frequencies at certain times and the inconvenience to Bantayan Island residents is real and for that we extend our apology for whatever BIPCOR shortcoming that had contributed to it. But the fault is not entirely due to our ‘constant engine failure’ as Mr. Rivera claims. Banelco distribution system line faults that could impair one or more line/feeders’ capacity to receive the required power delivery from BIPCOR also contribute to unscheduled load shedding, compounded further by the limitations of manual load shedding that occasionally lead to tripping of our plants,” Peñaloza.

Peñaloza also denied Rivera’s claim of a supply deficit in 2018 that was not addressed by BIPCOR.

“again, this is baseless, untrue, and in fact a cruel rewriting of reality considering that Banelco still owes BIPCOR P66 million from BIPCOR’S advances for the rental of three emergency diesel gensets of 1 MW each, from July 2017 to July 2019,” he said.

Peñaloza said that Banelco Res. No. 53 adopted on July 13, 2017 stated that, “because of this continued increase in demand and in order to revive the stunted economic growth of the Island due to brown outs, Banelco requested BIPCOR to resort to rental of generating units pending approval by ERC of the Banelco-BIPCOR joint petition for additional capacity of BIPCOR power plant.”

Banelco in its 2018 to 2027 power supply procurement plan note to existing contract with Bipcor said: “the maximum demand in the mainland has exceeded Banelco’s forecast resulting to an inadequate standby cold reserve… This however causes (sic) BIPCOR to install the applied new 3-MW generator even if we are still waiting for the approval of the said application.”

Peñaloza said BIPCOR did more than what was required and had not been paid for the effort.

“Banelco violated the CSP guidelines when it proceeded with the bid with only one bidder. The question is not simply due process but the competitive selection process as set out in the DOE guidelines which provide that if there are less than two bidders, the CSP is failed and a new bid shall be called,” he said.

He said that Section 9.2 of the DOE circular cited by Rivera provides: “A CSP… is considered failed only when: 1). No proposal was received; 2) Only one GenCo submitted an offer; 3) Competitive offers… failed to meet the requirements”.

“After summarily disqualifying BIPCOR, TPBAC was left with just one offer, and only one offer met the requirements, assuming the summary disqualification is upheld. Hence, it should not have proceeded with the bidding process,” he said.

“CSP is the due process and it was not observed or enforce. As for the presence of the observers from DOE, NEA and NPC, their attendance does not necessarily affirm the regularity of the process. In fact, their silence on the apparent disregard of CSP objectives—transparency, competitiveness and least cost –raises more questions on the process instead of compliance,” Peñaloza said.

He said Rivera mistook BIPCOR’S effort to insist strict compliance with CSP as simply an attempt to overturn the TPBAC arbitrary decision to exclude our bid on the basis of a missing notarial seal on the certification of our equipment supplier.

“For the record, all of our other documents in our first envelope were considered “Passed” and it was only on further deliberation that the Pass was recalled because of the missing notary, which we maintain is not a valid ground to disqualify us,” Peñaloza said.

Peñaloza said the awarding of the 15-MW supply contract for 15 years would have profound implications not only on BIPRCO but more so on the Banelco member-coop-owners who WOULD pay the rates that the TPBAC awarded. “With them, too, are the rest of the country’s electricity consumers who pay the subsidy to the REC generation rates,” he said.

“As we declared in our press statement of June 30, 2020, we paid a non-refundable P3.6 million protest fee to TPBAC to make sure that a competitive price is arrived at, that Banelco MCO get power supply at least cost and the rest of the country’s electricity consumers pay a just and right subsidy,” said Peñaloza.