Bayan Muna solon wary SC rule on power supply bid may be undermined

Bayan Muna Rep. Carlos Zarate. Noy Morcoso/INQUIRER.net

CAGAYAN DE ORO CITY – While he welcomed the Supreme Court ruling requiring distribution utilities to bid out their power supply agreements (PSA), a Mindanao lawmaker told the High Court that bidding procedures being used by Manila Electric Co. could undermine the Department of Energy (DOE)’s mandate to supervise the country’s power bidding process.

Rep. Carlos Zarate, along with Bayan Muna chair Neri Colmenares, expressed this concern even as they lauded the Supreme Court for deciding with finality to void 90 PSAs that did not undergo bidding. The High Court also required distribution utilities like Meralco to bid out its supply agreements.

But Zarate said this requirement could defeat the High Court’s decision in the first place as it would give Meralco full control of the bidding process and would oust the DOE and an independent third party from their supervisory roles in the bidding process.

“We wish to inform the Court the procedure being employed by Meralco could defeat its decision because it would grant Meralco full control of the bidding process and allows (Meralco) to self-deal with its affiliate companies,” said Zarate, who filed an intervention petition on the main case.

Zarate was referring to the DOE Circular 2018-02-003, which the legislator said effectively gave distribution utilities, like Meralco, a hand in the bidding process.

“It is difficult for suppliers, other than their affiliates of course, to reasonably bid for supply agreements,” Zarate said.

Colmenares, who was the co-intervenor of the case, said Meralco announced on Aug. 9 the opening of bids for some 2,800 megawatts of electricity. But the pre-bid conference held by the utility, according to Zarate, effectively disadvantaged suppliers which are not Meralco affiliates.

Zarate said Meralco wanted the bidding done by September 11 but the supply project was scheduled in 2024 yet. “Why the sudden rush?” Zarate said.

The rush to finish bidding, he said, “makes it nearly impossible for bidders to make a sound and intelligent bid with barely a month to prepare unless the supplier was given advance information by Meralco.”

Colmenares said technical specifications seemed to be tailor-fit for Meralco-affiliated suppliers, like the coal plant in Atimonan town, Quezon province.

Colmenares said Meralco control of the bidding process is a disadvantage to consumers.

The bids and awards committee for power supply is composed of three Meralco representatives and two other members are to be chosen by Meralco from the consumer sector, giving Meralco a majority in the bidding committee, Colmenares said.

Colmenares said Bayan Muna will file a bill to require really independent consumer participation in all boards and decision-making bodies of public utilities to protect consumer welfare.

He said the party-list group, in the meantime, was urging the Supreme Court or the DOE to issue rules requiring third party supervision in the bidding for power supply agreements to make sure that supply contracts sealed by Meralco bring the lowest rates.

Colmenares said electricity rates in the Philippines had been one of the highest in the world and that a bidding process controlled by distribution utilities would only exacerbate the heavy rates imposed on power consumers./TSB