A group has asked The Court of Appeals to stop the implementation of a power supply contract entered by an electric cooperative in Bantayan, Cebu, without subjecting it to the Competitive Selection Process.
In its petition, the United Filipino Consumers and Commuters Inc. told the court that allowing the power supply contracts without the CSP would prejudice all electricity end-users.
The UFCC, through its president Rodolfo Javellana, urged the appellate court to issue a writ of preliminary injunction to stop the Department of Energy, Energy Regulatory Commission, National Electrification Administration and National Power Corp. from approving the 15-megawatt, 15-year power supply contract agreement entered into by the respondents Bantayan Island Electric Cooperative, Consortium of Vivant Integrated Diesel Corporation, and Gigawatt Power Inc. through its subsidiary Isla Norte Energy Corp.
The UFCC said the CSP was 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.
“If the TRO and writ of preliminary injunction are not issued by the Honorable Court, grave injustice and irreparable injury would have already been incurred by petitioner, as end-consumers would be forced to pay for power supply at a rate obtained in violation of the principle of competitiveness, transparency and most affordable prices,” the petitioner said.
Javellana said the PSA awarded by Bantayan Island INEC did not meet the two-bidder standard of CSP.
Javellana cited DOE Circular DC2018-02-0003, which considers that a bid failed when “competitive offers of prospective generation companies failed to meet the requirements prescribed in the bid documents.”
BANELCO called for the CSP bid in July 2019 to replace its power supply contract expiring in November 2021 and two bidders qualified, Bantayan Island Power Corp. and the Vivant-GigaWatt consortium.
Conducted under a two-envelope format, the first envelope consisted of the technical proposal and the second, the financial or price offer.
At the opening of the bids on Sept. 20, 2019, according to UFCC, BIPCOR was disqualified after its first envelope was declared non-compliant by the bids committee because an Equipment Supplier certificate was not notarized.
BIPCOR is the sole power supplier of BANELCO whose contract expires next year.
After BIPCOR’s disqualification, the petition said, the consortium, now represented by INEC, “remained as the sole participant as there was no other bidder sanctioned to compete”.
Consequently, the contract was given to INEC, which is now being sought to be set aside by UFCC.
In its petition, UFCC cited the recent Supreme Court decision that upheld CSP as mandatory for all power supply procurements.
It said even if the disqualification of BIPCOR was warranted, the bids committee should have declared a failure of bidding instead of awarding the PSA to INEC.
“Despite the fact that there was only one remaining offer on the table, the respondent committee refused to declare a failure of bidding—a clear violation of the CSP Rules,” the petitioner claimed.
“When a bid is pursued with only one offer on the table as is the case now, how can that be competitive?” Javellana said.
“How do we determine the least cost with only one bidder?”
The UFCC said the DOE, ERC and NEA were named as respondents since they were the lead implementing arms and institutions in the implementation of the CSP.