CA asked to stop power supply contract given to Cebu distributor
MANILA, Philippines — A consumer protection group has asked the Court of Appeals (CA) to stop the awarding of a power supply contract to an electricity distributor on a Cebu island, on grounds that competitive selection was allegedly not followed.
According to the United Filipino Consumers and Commuters, Inc. (UFCC), the CA must act and stop the implementation of a power supply contract handed by an electric cooperative in Cebu’s Bantayan Island to a company for the supply of the island’s power requirements.
UFCC reasoned out that the selection cannot be considered competitive — not a reflection of a competitive selection process (CSP) — as the first bidder was disqualified, making the current company the winner supposedly due to default.
The Bantayan Electric Cooperative (Banelco), which manages electrical supply in the island had two bidders: the previous power provider whose contract was expiring, and the current provider which was given a 15-year contract.
But after initial checking the previous provider did not meet the standards set by Banelco, thus making the second bidder — now the provider — the winner.
While the Department of Energy (DOE) allows two bidders in a CSP, UFCC claimed this scenario cannot be considered an example of such because the other bidder lost in the initial stages due to non-compliance.
“CSP, according to UFCC president Rodolfo Javellana Jr., is a form of public bidding that must be observed in the purchase of electricity by distribution utilities to ensure a fair, reasonable and cost-effective generation charge for consumers,” UFCC said on Monday.
“In plain English, the UFCC president said, there must be more than one bidder for it to be CSP,” it added.
UFCC also noted a recent Supreme Court (SC) decision that maintained the CSP as a required step for all power supply procurements. Last August 2019, SC ordered the Energy Regulatory Commission to do a rebidding of power supply deals brokered on or after June 30, 2015.
This was meant to ensure that the CSP was maintained.
“The requirement is primarily aimed at ensuring a fair, reasonable, and least-cost generation charge to consumers under a transparent power sale mechanism between the generation companies and the distribution utilities,” Javellana said.
“When a bid is pursued with only one offer on the table as is the case now, how can that be competitive […] How do we determine least cost with only one bidder?” he asked.
