Group flags new bidding on power deals

Bayan Muna chair Neri Colmenares. INQUIRER file photo

CAGAYAN DE ORO CITY, Misamis Oriental, Philippines — While it welcomed the Supreme Court ruling requiring distribution utilities to bid out their power supply agreements (PSA), an activist group warned the high court the bidding proceedings used by Meralco could undercut the Department of Energy’s (DOE) mandate to supervise the process.

Bayan Muna Rep. Carlos Zarate and 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 may allow Meralco full control of the bidding process and exclude the DOE and an independent third party from supervising 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 allow [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 No. 2018-02-003, which effectively gives the distribution utility 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 cointervenor of the case, said Bayan Muna would file a bill that would require genuinely independent consumer participation in all boards and other major bodies of public utilities.

“In the meantime, we urge the Supreme Court or the DOE to step in and issue rules that will require third party supervision in the bidding process to ensure that the supply contracted by Meralco is the genuinely lowest possible price,” he said.

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TAGS: Carlos Zarate, Department of Energy, DoE, MERALCO, power supply agreements, PSAs
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