The Department of Energy (DOE) has ordered the National Electrification Administration (NEA) to facilitate the conduct of competitive selection process (CSP) for electric cooperatives (ECs) to source power supply from indigenous natural gas as a transition fuel.
With the CSP, a distribution utility (DU) or EC may sign a power supply agreement with a generation company only after calling for, and receiving, at least two qualified bids from generation companies.
The DU or EC will be allowed to have direct negotiations with other power suppliers only after at least two failed bidding procedures.
DOE Order No. 2023-10-0022 signed by Energy Secretary Raphael Lotilla on October 10 aims to ensure adequate and optimal allocation of natural gas for the provision of reliable power to complement the variability of renewable energy.
The order also said the move will encourage the full utilization of indigenous natural gas, including its aggregation and blending, to develop the domestic industry apart from ensuring a market for existing and future production of locally produced fuel.
The DOE said this will provide a transparent and competitive environment for natural gas stakeholders, specifically for distribution utilities to buy power from both brownfield and greenfield gas power facilities.
The issuance also mandates NEA to establish the necessary rules, guidelines and methodology for the conduct of the aggregation of demand of ECs from natural gas fired facilities.
