The Department of Energy and other power industry regulators have been urged to stop what an advocacy group described as dubious bid rating method for billion-peso power contracts adopted by two electric cooperatives.
Aya Jallorina, executive director of Matuwid na Singil sa Kuryente Consumer Alliance, in a press statement, asked: “What is `rubric` and what is it doing in the power industry?
“Why is an academic system of rating students’ essays being used to determine winners of public biddings for multi-billion peso contracts in the power industry?”
The consumer group raised these and called the government’s attention to “the emergence of a new but highly questionable bidding method being adopted by electric cooperatives that would lead to higher power rates in off-grid missionary communities and set an undesirable precedent for a competitive selection process.”
Jallorina said the ‘’rubric’’ scoring system being used by two electric cooperatives in Palawan and Marinduque was “highly subjective and arbitrary and is a dubious mechanism to award to the preferred supplier and discourage true competition.
“The government should disallow this method of bidding for supply power contracts.”
The MSK raised this in a letter to Energy Secretary Alfonso Cusi; Agnes Devanadera, chairman, Energy Regulatory Commission; Arsenio Balisacan, chairman, Philippine Competition Commission and Administrator Edgardo Masongsong of the National Electrification Administration.
The MSK was referring to the rubric scoring system adopted by the Marinduque Electric Cooperative (Marelco) and the Palawan Electric Cooperative (Paleco) to determine the “lowest responsive bid’’ for multi-billion peso power supply contracts.
The “rubric’’ system is widely used in the academe where students are graded for the quality of their work, like essays and other academic papers.
This allows teachers to evaluate quality of the student’s work where quantitative scoring is not possible.
"We are concerned that the `rubric scoring’ is another bid mechanism to enable the [power distributor] to award to a preferred supplier and will discourage true competition,’’ the MSK said.
The scoring system of Marelco, for example, gives only 50 percent weight to the bid price and 50 percent to the qualitative and credential scoring "that are arbitrary and subjective, the MSK said.
The electric cooperatives had resorted to this bidding method after the energy department disallowed the previous favorite resort of electric coops—the Swiss Challenge or the unsolicited proposals, which resulted in “more expensive power supply that has been bloating the missionary subsidies of these off-grid areas by billions of pesos every year,’’ the MSK asserted.
"We don’t believe rubric scoring is appropriate for CSP (Competitive Selection Process) biddings where the true cost of generation that is contained in the financial bid is what is paid for by the government,’’ it added.
Another term of reference that will unduly increase missionary subsidies is the current ERC and DOE practice of allowing guarantee capacity payments for base load power supply contracts that has resulted in significant over-contracting of even inappropriate and onerous terms of power contracts.
This, it said, is why Paleco has power supplies of 80 mega watts to meet its 50-MW demand and still experiencing brownouts. Now it is again bidding for 20-MW power supply to raise its contracted power to 100 MW, most of which will be guaranteed payments whether power is used or not.
“The old system of bidders minimum credential qualifications and definitive and verifiable specifications awarded 100 percent on straight comparable financial bids works and is more transparent and truly competitive,’’ MSK said.