DOE extends deadline of bid submission for power spot market

The Department of Energy (DOE) has extended until June 30 the deadline for the submission of bids for the operation of the wholesale electricity spot market (WESM).

Under the WESM, electricity will be traded at the spot market wherein generators will compete against each other to supply power to the grid. With this system in place, consumers will be able to choose their supplier offering the least cost of power.

The Electric Power Industry Reform Act (Republic Act 9136) mandates the establishment of the WESM. The creation of the WESM is also expected to result in higher efficiency of service, transparency in the generation charges and in the long term, help reduce power rates.

Energy Undersecretary Cyril C. del Callar, who is also the chairman of the Special Bids and Awards Committee (SBAC), said the new deadline, originally set on June 16, will allow bidders additional time to prepare their bid proposals and result in more competitive and attractive offers.

Twelve foreign and local firms, with expertise in the operations of electricity trading, have expressed intention to participate in the bidding for the WESM following the last day of purchasing of bid documents last Friday, June 6.

Based on the approved bidding procedures of the Asian Development Bank’s International Shopping rules, a two-stage, two-envelope bidding procedure will be followed wherein participating bidders will submit two sealed envelopes, one for the technical proposal and the other for the price bid.

At the second stage, bidders will be allowed to submit a modified bid proposal based on agreed technical standards after the evaluation of the technical proposal.

Given the agreed extension period, technical proposals will be opened on June 30 for evaluation by the SBAC and a newly-created Technical Working Group (TWG). The SBAC and TWG are composed of representatives from the DOE, the National Transmission Corp. (Transco) and observers from the Department of Finance and the National Economic and Development Authority.

Only the price proposals that passed the technical evaluation will be opened. Technical proposals will be evaluated as to who among the participating bidders substantially complied with the requirements and whose software and hardware systems are most responsive.

The project will be awarded to the lowest substantially responsive bid upon the concurrence of the ADB, the funding agency for the WESM project.