Presentation to Edita Bueno, NEA Administrator and other NEA executives

1. Power Supply
Joint-Action
Nick Nichols
Viking Logarta
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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
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7. What ECs Pay NPC For
Cor. Agham Rd. Power Out of the
And
and Quezon Ave. Generator
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8. What ECs Pay NPC For
Planning Procurement
Power Out of the
Generator
Contract Dispatch
Management Services
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9. Under EPIRA, ECs will
pay IPP for:
Power Out of the
Generator
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10. Planning Procurement
You have to do all
of these ...
WESM
Contract
Participation
Management
& Dispatch
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11. ... To Get This
Power Out of the
Generator
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12. Procurement
Process
WESM
Contract
Participation
Management
& Dispatch
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13. Shifting these costs to ECs need not add costs to
ratepayers
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14. But we can’t have a mini NPC at each EC
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15. Fundamental Drivers
Bargaining Power
Shared Services (to lower costs)
Procure expertise in short supply
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16. Two Models
Joint Services
Power Supply Cooperative
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17. Bigger roadblocks to establishing Supply Cooperative
But
Joint Services implementation facer greater challenges in
conducting power supply procurement
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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
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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
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20. Supply Cooperative
• Juridical entity that can buy and sell
power
• Can perform Planning, Procurement,
Contract Management, Dispatch
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21. Supply Cooperative
Juridical Entity Issues
• Wholesale Aggregator?
- 5 Yrs
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22. Supply Cooperative
Juridical Entity Issues
• Wholesale Aggregator?
- So far all are SEC. Not-for-profits?
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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
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24. Supply Cooperative
Juridical Entity Issues
• Wholesale Aggregator?
- ECs must procure under ERC’s
competitive solicitation guidelines
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25. Why Full-Requirements Contracts may be important
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26. Why Full-Requirements Contracts may be important
Open Access Considerations
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27. Sales for Resale Issues
• Under EPIRA, Sales for Resale are not
price-regulated by ERC
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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.
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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?
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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
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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.
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