The Department of Energy (DOE) is sorting out a policy prescription that will institutionalize the creation of a five-man third party to oversee the auction processes on power supply contracting of the distribution utilities.

Under the DOE-drafted modified Competitive Selection Process (CSP) framework of DU power supply contracting for its captive customers, the plan is to have that third party comprise of people from various disciplines, one of which will be from the legal profession.

It has been stipulated in the DOE-proposed rules that the board of directors of the DU shall establish the propounded third party bids and awards committee (TPBAC) that will then “spearhead and manage the CSP.”

Aside from a lawyer, the others to constitute the TPBAC should be a finance officer or an accountant; two officers of the concerned DU and one DU officer or employee knowledgeable in procurement rules, including international competitive bidding procedures.

“The Board of Directors of the DU shall serve as observer and not as member of the third party bids and awards committee,” the DOE draft rules emphasized.

In a media briefing with Energy Senior Undersecretary Jesus Cristino P. Posadas, he qualified that the third party body is still not limited to this option, but they are also giving prime consideration to have it placed under the Philippine Electricity Market Corporation (PEMC) – at least to align it with the pending CSP Bill of Senate Committee on Energy Chairman Sherwin T. Gatchalian.

But he noted that they would want that third party to police power supply procurement to avoid previous practices of just having the CSP scheme done through “price matching” processes.

“We are looking for the disinterested party that will do it, we’re looking at the best way of doing it,” the energy official said.

In the previous CSP edict, any scheme of bidding was accepted; and processes had just been leaning on the preferences of DUs at that time.

In the rules rectification, Posadas stated that the DOE will set off the policy guide – even in demand aggregation for the supply contract to be procured, so that the DUs would no longer resort to procedures that may be perceived as ‘sweetheart deals’.

“We are going to implement a more objective form of sourcing electricity for DUs… say, in a particular given area, we also need to look for ways on how to scale up demand so they could attract good offers,” he stressed.

The energy official further noted that the department will likely be firming up a written policy prescription or Circular on this policy direction around first quarter of next year.


Velasco, M. M. (December 13, 2017). DOE eyes 5-man team as 3rd party in power supply auctions. Manila Bulletin. Retrieved from https://business.mb.com.ph/2017/12/13/doe-eyes-5-man-team-as-3rd-party-in-power-supply-auctions/

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