It was an offer made which they could not refuse – “a very very attractive offer of P3.30 per kilowatt hour price of electricity against the present price of more than P5.00”.
This was the story behind the One Bohol Power Joint Competitive Power Supply Procurement (1BP JCPSP) submission and opening of comparative proposals on January 15, 2016 from three power companies organized by the Bohol Electric Cooperative (BOHECO) 1 and ll.
As told by University of the Philippines Professor Rowaldo del Mundo, Team leader of the United States Agency for International Development Advancing Philippine Competitiveness Project (USAid-Compete) for power – “as we were securing the province short term and medium power supply, GN Power Ltd, Co. sent us a medium term power supply proposal with an independent short term supply proposal that was very attractive”.
Del Mundo said “this price offer is the lowest we have received in the country so we decided to design a bidding process similar to a Swiss challenge to test the market against the price offer”.
A Swiss Challenge is defined as a process in public procurement when a public authority which has received an unsolicited bid for a project publishes details of the bid and invites third parties to match or exceed the bid.
TEMPORARY FIX
“But this covers only the uncontracted portion of the power requirements of the two electric cooperatives (EC’s). Consumers will still be paying the present rates since these were contracted before this development”, added Del Mundo.
According to Del Mundo, the legal basis for the unified actions of the two EC’s is Section 23 of RA 9136 or the Electric Power Industry Reform Act that encourages distribution utilities (DU’s) to pursue operational reforms such as joint actions to achieve improved efficiencies, reliability of service and reduced costs.
However, this latest development will meet the uncontracted demand that Bohol’s two electric cooperatives are obligated to procure to supply their captive customers, according to the Bohol Island Least-Cost Power Supply Plan.
With total power demand this year forecasted at 68MW and will hit 85MW by 2024, the uncontracted demand for Bohol in 2016 is predicted at 35MW and is expected to rise at 68MW by 2024.
These figures were culled from the projected total power requirements up to 2043 from the The Bohol Energy Development Advisory Group – Technical Working Group (BEDAG-TWG) created by Governor Edgar Chatto under Executive Order 13 series 2014.
UNSOLICITED
The power supply price offered on September, 2015 by GN Power prompted Boheco 1 and 2 to present the 1BP JCPSP competitive selection process through comparative proposals by publishing details of the bid and inviting other interested parties to match or exceed GN Power Ltd. Co.price proposal.
Two Generation Companies (Genco’s) responded and submitted their proposals – First Gen Corporation and Trans- Asia Oil & Energy Development for the supply of short and medium term baseload demand for years 2016 to 2023.
According to Engr. Danilo Quidlat, JBAC Chairman, GN Power, the original proponent, offered a short term base price of P4.7457/kwh for 2016-1018 and medium term proposal of P3.3654/kwh from 2019-2023.
First Gen Corporation responding to GN Power’s price submitted a proposal of P4.4218 for short term and P4.4218 for medium term while Tans-Asia Oil & Energy Development offered a short term only price of P5.5118.
LOWER RATES
Tito Andamon, chairman of the 1BP-JCPSP CSP Bids and Awards Committee bared that First Gen ranked 1st in the evaluated effective levelized price per kilowatt hour (ELP) for the short term supply with P4.824324328 while GN Power, the original proponent bagged the mid-term supply with an ELP P4.008996034.
Boheco 1 electric rates for December, 2015 is P8.2351/kwh for residents in the mainland and Cabilao Island and P8.3060 for other islands. For commercial, public buildings and street lights, the rate is P7.3837.
With 2023 as the target date for the completion of a baseload plant in Bohol and a loop line or N-1 redundancy power line connecting Cebu and Bohol, the approved short and medium term electric supply will serve as a stop gap measure to avoid a crippling power shortage experienced in Bohol in the aftermath of the 2013 earthquake and Typhoon Yolanda.
For Boheco ll electric rates for November, 2015, residential was P9.8973 while commercial electric rates stood at P8.7248.
Boheco 1 serves 26 municipalities under Engr. Dino Nicolas Roxas while Boheco ll covers 21 towns and is headed by Engr. Eugene Tan.
The submission and opening of comparative proposals for the supply of Boheco 1 and ll’s aggregated short term and medium term baseload demand for 2016-2023 was held at the Bellevue Hotels and Resort in Brgy, Doljo, Bohol. (Chito M. Visarra)