Senator Sherwin Gatchalian said over the weekend the government should be allowed to conduct public bidding to ensure power power supply needed by the distribution utilities.
“There’s a lot fine-tuning that we need to do in EPIRA [Electric Power Industry Reform Act] …I have a proposal wherein the government should be allowed to conduct the bidding process,” Gatchalian said.
Gatchalian said it is the role of the government to determine the power supply needed in the next ten years, and it is the one that should conduct the bidding.
He said that under the competitive selection process regime, DUs such as the Manila Electric Co. are the ones that conduct the bidding.
Gatchalian said his proposal would promote fair competition or level playing field.
“DOE has safeguards, and I think we should give that option to the government as well for emergency purposes and also for fairness,” he said.
He said the proposal would also avoid blackout, because some utilities had delayed the conduct of CSPs.
“Government wants to avoid brownouts, so it will conduct CSP as soon as possible, so there will be supply,” he said.
Gatchalian said this would need a new law or amendments to the EPIRA law.
He said that while some economists would say this would be equivalent to market distortion, “I think that right should be reserved for the government. “
“The economists will not like it, but from a practical point of view, it can be done,” he said.
Meanwhile, conglomerate San Miguel Corp. said it would continue participating in CSPs or bidding for power supply despite its failure to get a temporary rate hike for its 2019 power supply agreement with Meralco.
The Energy Regulatory Commission denied the petition of SMC and Meralco for a temporary increase of about P0.30 per kilowatt-hour over six months.
“We always participate in all government bidding,” SMC president Ramon Ang said.
“We will join based on the conditions of TOR [terms of reference] of DOE,” Ang said when asked whether he would continue to bid under the fixed-price terms.
SMC sought to recover P5 billion worth of losses from the unprecedented increase in coal prices and the gas constraints from the Malampaya gas project in northwest Palawan.