Renewable energy associations are seeking clarification from the Office of the Executive Secretary on the procurement rules issued by the Department of Energy, which ran contrary to the policy of the Energy Regulatory Commission.
The Developers of Renewable Energy for Advancement, an alliance of renewable energy developers associations, sought the opinion of Executive Secretary Salvador Medialdea regarding the validity of the Swiss Challenge form of procurement.
The group sent a letter to Medialdea regarding the “impasse” between DoE and the ERC over the unsolicited proposals or Swiss Challenge procedure supposedly prohibited by Department Circular No. DC 2018-02-0003 entitled “Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market.”
The group said while the DoE circular prohibited Swiss Challenge, it was allowed under the draft rules of the ERC entitled “Rules Governing the Execution, Review, and Evaluation of Power Supply Agreements entered into by Distribution Utilities for the Supply of Electricity to their Captive Market”
“We seek confirmation…as the current inconsistent policies of the DOE and ERC have resulted in the inability of our members to proceed with their planned investments in renewable energy by submitting detailed and well-submitted proposals to distribution utilities and electric cooperatives,” the group said.
The group said the unresolved issue had prevented distribution utilities and electric cooperatives from pursuing collaboration with renewable energy developers in building new power plants.
The new power plants are supposed to comply with DOE Circular DC 2017-12-0015 or the rules governing the establishment of the renewable portfolio standards for on-grid areas.
The rules mandated power industry participants to source or produce a specified portion of their electricity requirements from eligible renewable energy sources.
The group said the Swiss Challenge was a valid form of the competitive selection process and was not prohibited under the Electric Power Industry Reform Act of 2001.
It said the ERC had the sole authority under the Epira law to issue rules and regulations pertaining to the supply by distribution utilities and electric cooperatives to the captive market, including the procedure for procurement. Alena Mae S. Flores
“DOE and the National Electrification Administration may advocate certain procedures for procurement, but the same should be viewed only as evocative and not prescriptive or mandatory as ERC has the final authority to approve power supply agreements entered into by distribution utilities and electric cooperatives,” it said.
The group said Energy Undersecretary Felix William Fuentebella issued an advisory to clarify the provisions of the CSP rules, declaring that the rules “do not allow unsolicited proposals from suppliers.”
It said the advisory failed to observe due process and did not interpret any provision in the Epira law.
“There is nothing in the 2018 DOE CSP Rules that expressly prohibits unsolicited proposals or Swiss Challenge,” the group said.