The 11 Electric Cooperatives (ECs) in Region 8 namely DORELCO, LEYECO II, LEYECO III, LEYECO IV, LEYECO V, SOLECO, BILECO, SAMELCO I, SAMELCO II, ESAMELCO and NORSAMELCO agreed through a Memorandum of Agreement (MOA) backed by board resolutions of each EC, to jointly conduct a Competitive Selection Process (CSP) for their base load power supply for 2019 to 2038.
The objective of the said undertaking is to secure the supply of electricity for the captive customers and to mitigate the risks in the electricity market through bilateral power supply contracts. Likewise, it also aims to achieve least-cost supply of power through joint power supply planning and competitive procurement process that can be justly and reasonably passed-on to the member-consumers.
In 2015, the RENAGMEC, Region 8 association of ECs, received an unsolicited proposal from GNPower Dinginin Ltd. Co. to supply their aggregated 150 MW uncontracted demand for the contract years 2019-2038. The price of the proposal is equal to the latest lowest power rate in the Philippines achieved through a competitive bidding process but without the risks of power plant outages. In accordance with the agreed policies of Region 8 ECs for Joint Competitive Power Supply Procurement (R8 JCPSP), the RENAGMEC accepted the said proposal and declared the GenCo, through a board resolution, as original proponent of an unsolicited proposal that will be subjected to CSP through Comparative Proposals which is also known as Swiss Challenge.
The R8 JCPSP Board composed of all the Board Presidents and General Managers of the 11 Region 8 ECs created the Region 8 Bids and Awards Committee (R8 BAC) and Technical Working Group (TWG) and appointed third party transaction advisors to design and execute the CSP.
To test the market whether the offered rate is the lowest, generation companies were invited to participate in the transaction through publication in newspapers of general and national circulation for two (2) consecutive weeks and through written invitation to all Generation Companies (GenCos) listed in the Department of Energy’s website. Two GenCos responded the invitation and purchased the bid documents while only one of the two submitted its actual bid. Result of the Bid Opening which was held at Lex Hotel, Cebu City last October 24, 2015 revealed that, still the Original Proponent’s offered rate is the lowest in the market. GNPower Dinginin Ltd. Co. was awarded with Power Supply Agreement (PSA) equivalent to the aggregated demand of the region’s ECs. Each EC signed individual but identical PSA with the winning proponent for their respective committed capacities, to wit:
DORELCO – 12 MW
LEYECO II – 8 MW
LEYECO III – 3 MW
LEYECO IV – 16 MW
LEYECO V – 31 MW
SOLECO – 12 MW
BILECO – 10 MW
SAMELCO I – 12 MW
SAMELCO II – 15 MW
ESAMELCO – 15 MW
NORSAMELCO – 16 MW
