TP-BAC more qualified than FICELCO directors
posted 6-Aug-2018  ·  
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Now that the load shedding is over, the First Catanduanes Electric Cooperative, Inc. (FICELCO) is in the right path in pursuing the procurement of a new power supplier.

The management headed by General Manager Engr. Raul Zafe has already created the so-called Third Party Bids and Awards Committee (TP-BAC) pursuant to a recently approved policy for the Competitive Selection Process (CSP).

The policy mandates that all Power Supply Agreements (PSAs) shall be procured through CSP, ensuring transparency through wide dissemination, competitiveness by extending equal opportunity to qualified generation companies, least cost of power by ensuring that demand for power is met at any given time, streamlined process suited to the needs of the distribution utility, and accountability in the procurement process and implementation of the agreement.

It is no secret to knowledgeable members of the public that past power supply contracts entered into by the FICELCO board were not attended by these essential elements of a prudent procurement process now belatedly being enforced by the national government.

All of them were acquired through a Swiss Challenge in which a public utility receives from a private firm an unsolicited proposal, which has to be matched or exceeded by other interested parties. Of course, in most cases, there is no other proposal and thus, the unsolicited offer, whether carefully studied or not, becomes the basis of an agreement that will bind the cooperative, and its tens of thousands of customers, to the agreement for 25 or 30 years.

The ill-fated deal of FICELCO with Power One Corp. began the string of unfortunate events for the Catanduanes island grid. When the Tribune sought a copy of the Power One agreement, the firm’s officials politely refused and said it had a confidentiality clause.

When the corporation imploded over certain disagreements, the remains were picked up by Catanduanes Power Generation, Inc. (CPGI), which then used a genset leased by FICELCO from the National Power Corporation. To the loss of the consumers it was supposed to ensure reliable supply of electricity, the board removed from the contract a provision that CPGI install its own genset as a back-up.

The same Swiss Challenge was resorted to in the case of Sunwest Water & Electric Co. (SUWECO), with its contract carrying the same confidentiality provision. An audit conducted by the National Electrification Administration (NEA) on the amendments made to the ESA showed that the directors did not conduct a diligent study of the amendments, the latter of which bound FICELCO to inform the company of any power deficiency which SUWECO is bound to address.

The lesson here is that majority of the directors involved in the approval of the power supply agreements did not have technical knowledge or even an inkling of how it would affect consumers. Only a few were engineers or lawyers, while most were government retirees and former teachers with absolutely no idea of how the cost of electricity is computed.

Here comes now the TP-BAC, which the new policy provides should have as members an employee of the utility knowledgeable in its technical operations, an officer with experience in competitive bidding procedures, a lawyer, a finance officer who knows electricity pricing, and a technical person experienced in similar bidding procedures. Two of the members will have to come from among the member-consumers.

The contrast with the qualifications of a member of the FICELCO board of directors, who decide on far weightier matters, makes one wonder when the NEA would fine-tune the latter requirements to limit board membership to those who have the capability to sift through the technical jargon.

Of course, there is no certainty that an electrical engineer would be impervious to monetary inducements offered to, and accepted by, directors of lesser educational qualifications. That would be a matter of character, which is harder to fulfill these days.

But, at the very least, a technical man elected to the cooperative’s BOD can no longer claim ignorance when accused of signing a contract not favorable to member-consumers.

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