The Department of Energy has admitted that some defects in its 2018 circular governing the conduct of bidding for power contracts may result in higher electricity rates.
Zamboanga City Rep. Manuel Jose Dalipe, vice chairman of the House of Representatives’ Committee on Appropriations and DOE budget sponsor, on interpellation during his sponsorship speech agreed with interpellator Bayan Muna Rep. Carlos Zarate that the circular was indeed defective.
“What will happen is, the Supreme Court decision mandating a Competitive Selection Process would be rendered meaningless. It’s the consumers who will be the losers at the end of the day. Do you agree Mr. Sponsor?” Zarate asked Dalipe.
“Yes Mr. Speaker. Actually the DOE is reviewing that circular because as manifested by the honorable gentleman, it appears that way,” answered Dalipe.
Zarate, a senior deputy minority leader, was referring to DC 2018-02-003, which changed the rules for bidding or CSP for proposed power supply agreements laid down by DC 2015-06-008 three years earlier.
The 2015 circular required a third party recognized by the DOE and Energy Regulatory Commission to supervise the bidding and ensure that the bidding process and its terms of references are not totally controlled by distribution utility.
However, the 2018 circular allowed DUs to handpick the members of the five-man third party bids and awards committee.
“Yes [that is correct],” replied the budget sponsor when asked by Zarate to confirm this information.
Dalipe also said that DOE issued DC 2018-02-003 despite receiving no complaints regarding the bidding rules for proposed power plants set by DC 2015-06-008.
“This is a result of focused group discussion and public consultation… The primary intent was to fast-track it and make it better,” he told Zarate.
“Why the sudden change? The change is not just procedural but very substantial…the DOE and ERC are reduced to just mere observers. The DUs will run the CSP. That’s what we are worried about,” Zarate said.
The militant lawmaker said the SC-ordered CSP is important because it assures consumers that the electricity they pay for was procured at the least cost possible.
However, the DU-appointed third party BAC comprises this aim due to questions of independence.
“The provisions of the first cicurlar aren’t like that. The DOE and ERC had the power to choose a true independent third party,” Zarate said.
Dalipe in response said, “Yes we will look into that, we will look for improvements and we will take note of that.”