EC Joint Action

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Presentation to Edita Bueno, NEA Administrator and other NEA executives

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EC Joint Action

  1. 1. Power Supply Joint-Action Nick Nichols Viking Logarta 1
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  4. 4. To Download a copy of Report, go here: http://drop.io/3mitlvk# Philippine Power Sector Blog http://asianenergyadvisors.com Email: nick@asianenergyadvisors.com viking@asianenergyadvisors.com 4
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  7. 7. What ECs Pay NPC For Cor. Agham Rd. Power Out of the And and Quezon Ave. Generator 7
  8. 8. What ECs Pay NPC For Planning Procurement Power Out of the Generator Contract Dispatch Management Services 8
  9. 9. Under EPIRA, ECs will pay IPP for: Power Out of the Generator 9
  10. 10. Planning Procurement You have to do all of these ... WESM Contract Participation Management & Dispatch 10
  11. 11. ... To Get This Power Out of the Generator 11
  12. 12. Procurement Process WESM Contract Participation Management & Dispatch 12
  13. 13. Shifting these costs to ECs need not add costs to ratepayers 13
  14. 14. But we can’t have a mini NPC at each EC 14
  15. 15. Fundamental Drivers Bargaining Power Shared Services (to lower costs) Procure expertise in short supply 15
  16. 16. Two Models Joint Services Power Supply Cooperative 16
  17. 17. Bigger roadblocks to establishing Supply Cooperative But Joint Services implementation facer greater challenges in conducting power supply procurement 17
  18. 18. Joint Services • Not empowered to buy and sell power • Acts as agent • Facilitates conduct of power supply activities • Could be a consortium of EC or outsourced to a private sector firm 18
  19. 19. Joint Services Problems • Coordinated procurement mechanics complex for robust supply portfolio • Juggle 1-to-1 allocations of IPP products • IPPs continue to price offers based on fractured nature of ECs • Doesn’t have “sole obligation” to procure 19
  20. 20. Supply Cooperative • Juridical entity that can buy and sell power • Can perform Planning, Procurement, Contract Management, Dispatch 20
  21. 21. Supply Cooperative Juridical Entity Issues • Wholesale Aggregator? - 5 Yrs 21
  22. 22. Supply Cooperative Juridical Entity Issues • Wholesale Aggregator? - So far all are SEC. Not-for-profits? 22
  23. 23. Supply Cooperative Juridical Entity Issues • Wholesale Aggregator? - Under EPIRA it’s a Generator Sector entity thus subject to cross-ownership and anti-competitive rules 23
  24. 24. Supply Cooperative Juridical Entity Issues • Wholesale Aggregator? - ECs must procure under ERC’s competitive solicitation guidelines 24
  25. 25. Why Full-Requirements Contracts may be important 25
  26. 26. Why Full-Requirements Contracts may be important Open Access Considerations 25
  27. 27. Sales for Resale Issues • Under EPIRA, Sales for Resale are not price-regulated by ERC 26
  28. 28. Cost Recovery Issues • Under Joint Services - no roadmap for cost recovery by DUs & it’s not in the “benchmarks” • Under Supply Cooperative - more like NPC. Except - NPC’s tariffs were regulated. 27
  29. 29. Special Nature of Supply Cooperative • Supply Cooperative = joint action extension of ECs own obligation to procure competitively • Supply Cooperative undertakes competitive solicitation. EC members should be relieved of obligation • Sales for Resale are not regulated under EPIRA. What is regulatory framework? 28
  30. 30. Transitioning to Supply Co-op - Work to be done • Legal & Regulatory, Consultations --> Appropriate juridical entity • ERC, Congressional, SEC? Processes • Charter, governance issues, licenses • Staffing Plan, Financing Plan, Action Plan • Can’t expect first regional group to 29
  31. 31. Photo Credit Hubble Space Telescope, photo PR96-27B by the European Space Agency and NASA http://grin.hq.nasa.gov/BROWSE/gallaxies_3.html Emission nebula NGC 604 lies in a spiral arm of galaxy M33, 2.7 million light- years away in the constellation Triangulum. This is a site where stars are being born. 30

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