DOE issues rules on contracting AS
BY LENIE LECTURA – OCTOBER 27, 2021
from Business Mirror
THE Department of Energy (DOE) on Wednesday released a circular that establishes the competitive bidding process for the procurement of reserve power by the country’s system operator (SO).
Signed last October 4 by DOE Secretary Alfonso G. Cusi, Department Circular No. 2021-10-0031 states that the National Grid Corporation of the Philippines—the country’s SO—must form an independent Third Party Bids and Awards Committee (TPBAC). Three of the committee members will come from NGCP, one from the Independent Electricity Market Operator of the Philippines (IEMOP) and one from the National Transmission Corp. (TransCo).
Six months from the effectivity of the circular, the SO must conduct a competitive selection process (CSP) for the procurement of ancillary services purchase agreement (ASPA) for a contract period of a maximum of five years.
The SO is also required to submit to the DOE its annual AS agreement procurement plan, which contains the projected AS requirements for the next 10 years, not later than every end-March of each year.
“Contracting AS through competitive selection shall improve transparency, competitiveness, and wide dissemination of bid opportunities to ensure participation of all eligible generation companies to meet the required level of AS,” the circular read.
For transparency, the TPBAC will tap observers from the DOE, Energy Regulatory Commission (ERC), and the National Electrification Administration (NEA).
The terms of reference will have to be approved by the DOE.
The TPBAC, among others, will update the DOE on the status of all stages of the procurement process; determine the lowest bidder; and evaluate the legal, technical and financial qualifications of the bidders.
The winning bidders and the SO will file the signed ASPA for approval of the ERC.
Direct negotiations maybe made after two failed CSPs.
The circular also states that all non-firm ASPAs not converted to firm ASPAs upon effectivity of the circular shall be valid and effective. However, the firm ASPAs will be prioritized over non-firm ASPAs.
