Power Supply Joint-Action

Nick NicholsViking Logarta

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To Download a copy of Report, go here:http://drop.io/3mitlvk#

Philippine Power Sector Bloghttp://asianenergyadvisors.com

Email:nick@asianenergyadvisors.com

viking@asianenergyadvisors.com

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What ECs Pay NPC For

Power Out of the Generator

Cor. Agham Rd. and Quezon Ave. And

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What ECs Pay NPC For

Planning Procurement

ContractManagement

Dispatch Services

Power Out of the Generator

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Under EPIRA, ECs will pay IPP for:

Power Out of the Generator

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Planning Procurement

ContractManagement

WESM Participation & Dispatch

You have to do all of these ...

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... To Get This

Power Out of the Generator

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ContractManagement

WESM Participation & Dispatch

Procurement Process

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Shifting these costs to ECs need not add costs to ratepayers

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But we can’t have a mini NPC at each EC

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Fundamental Drivers

Bargaining Power

Shared Services (to lower costs)

Procure expertise in short supply

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Two Models

Joint Services

Power Supply Cooperative

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Bigger roadblocks to establishing Supply Cooperative

But

Joint Services implementation facer greater challenges in conducting power supply procurement

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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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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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Supply Cooperative

• Juridical entity that can buy and sell power

• Can perform Planning, Procurement, Contract Management, Dispatch

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Supply Cooperative Juridical Entity Issues

• Wholesale Aggregator?

- 5 Yrs

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Supply Cooperative Juridical Entity Issues

• Wholesale Aggregator?

- So far all are SEC. Not-for-profits?

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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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Supply Cooperative Juridical Entity Issues

• Wholesale Aggregator?

- ECs must procure under ERC’s competitive solicitation guidelines

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Why Full-Requirements Contracts may be important

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Why Full-Requirements Contracts may be important

Open Access Considerations

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Sales for Resale Issues

• Under EPIRA, Sales for Resale are not price-regulated by ERC

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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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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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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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Photo Credit

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.

Hubble Space Telescope, photo PR96-27Bby the European Space Agency and NASAhttp://grin.hq.nasa.gov/BROWSE/gallaxies_3.html

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