Third-party investors sought for unenergized service areas of DUs

By MYRNA M. VELASCO – January 11, 2020, 10:00 PM
from Manila Bulletin

The government, through a policy direction set out by the Department of Energy (DOE), is inviting third- party investors that shall energize the areas unserved or underserved by the distribution utilities (DUs) all over the country.

“All unviable, unserved and underserved areas, which the DU cannot provide electricity services for whatever reason, shall be open for participation by QTPs (qualified third parties),” the DOE has stipulated.

According to the energy department, it will consolidate and make available to the public the list of QTP service areas within 40 working days upon finalization and posting of the comprehensive total electrification master plan.

A full or 100 percent electrification of all households in the country stands as a flagship program of the Duterte administration in the energy sector.

As defined, a QTP is an alternative electric service provider duly qualified and authorized by the Energy Regulatory Commission (ERC) to serve QTP service areas as prescribed under Section 59 of the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

An “unserved area” would refer to a domain or community with no electricity access, distribution system lines, individual home system or connection to any microgrid system; while an “underserved area” pertains to jurisdictions where electricity services are less than 24 hours daily.

Moreover, an “unviable area” delves with a geographical patch within the franchise area of a distribution utility where immediate extension of the distribution line is not feasible.

The DOE has directed that “all unviable, unserved and underserved areas, which are not submitted by the DUs as QTP service areas, may be nominated by the QTP proponent to the DOE,” but such shall be subject to the agency’s validation and declaration.

Further, it has been mandated that each board of directors of the DU or the Small Power Utilities Group (SPUG) of state-run National Power Corporation, shall establish an independent QTP bids and awards committee (QTP-BAC) “to spearhead and manage the competitive bidding for QTP.”

For the bids and awards committee, it was further decreed that the DU or NPC-SPUG shall designate five members into that body; and must be submitted to the DOE for posting into its website.

“The board of directors of the DU or NPC-SPUG may only serve as an observer and not as a member of the QTP-BAC,” the DOE has noted.

For the auction phase, the instruction of the DOE is for “the bid documents and TOR (terms of reference) to be submitted by the private DU to the DOE or to NEA (National Electrification Administration) in the case of the electric cooperatives – for review and evaluation – within 20 working days after the date of posting of the QTP service areas.”