ECs told to start competitive bidding

MANILA, Philippines — State-run National Electrification Administration (NEA) directed electric cooperatives (ECs) with power supply agreements (PSAs) expiring in the medium term to start conducting competitive selection process (CSP).

In a regulatory advisory issued last week, the NEA said all ECs with PSAs set to end in three to five years are “highly suggested to commence the conduct of your respective CSPs to ensure continuous and sufficient power supply in your area.”

The directive is in line with the CSP policy issued by the Department of Energy (DOE) in 2019, which was aimed to speed up power supply procurement.

The CSP is mandated by government to get the least cost power to consumers.

In a separate regulatory advisory, the NEA also told ECs to review their existing PSAs to provide the most affordable electricity rates to their member-consumers, in compliance with the CSP policy.

The state-run firm also advised power coops to renegotiate with their respective power suppliers to trim down over-contracted power supplies.

“With respect to reducing transmission and systems losses, it is most prudent to source the required capacities from within the operating region. This, however, should not be construed to delimit interested bidder or discriminate against other supplier-proponents from participating in the conduct of CSP,” the NEA said.

The advisory was issued after a review on ECs’ Residential Unbundled Rates for September 2021 showed over 44 percent of the 121 ECs manifested considerably high energy charges while significant increases from the previous quarter were observed among 18 percent of the country’s ECs.

“The upsurge in electricity rates for the said period was mainly attributed to the high fuel prices due to the price hike of coal in the world market,” the NEA said.

To mitigate further increase in energy charges, the state-run firm said all ECs – especially those with notably high system losses and/or those which have exceeded the 12 percent threshold set by the Energy Regulatory Commission (ERC) – should strengthen and strictly implement their Systems Loss Reduction Program (SLRP).

“Accordingly, ECs must identify distribution system losses in their networks founded upon and segregated based on respective components to be able to determine the most effective SLRP,” the NEA said.