Procurement of Technical Assistance Tender in Philippines - 28942483

Procurement Summary

Country: Philippines

Summary: Procurement of Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of The Wholesale Electricity Spot Market (WESM)

Deadline: 14 Dec 2018

Posting Date: 04 Dec 2018

Other Information

Notice Type: Tender

TOT Ref.No.: 28942483

Document Ref. No.: Lot No. 2018-16

Competition: ICB

Financier: Self Financed

Purchaser Ownership: -

Tender Value: Refer Document

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Tender Details

Procurement of Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of The Wholesale Electricity Spot Market (WESM)
Terms of Reference
INTRODUCTION
Section 30 of Republic Act (R.A.) No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (-œEPIRA-), mandates the Department of Energy (DOE) to establish a Wholesale Electricity Spot Market (-œWESM-) which -œshall provide for the mechanism for identifying and setting the price of actual variations from the quantities transacted under contracts between sellers and purchasers of electricity.-
Likewise, the EPIRA mandates that jointly with the electric power industry participants, the DOE shall formulate the detailed rules for the WESM and the Price Determination Methodology (-œPDM-) contained in the said rules shall be subject to the approval of the Energy Regulatory Commission (-œCommission-).
Pursuant to the Commission-s Rules of Practice and Procedures, the Commission after thorough evaluation and deliberation, approved on 20 June 2006, the PDM for the WESM which was filed by the DOE through the Philippine Electricity Market Corporation (-œPEMC-). The PDM aims to provide the market participants with the specific principles and the mathematical formula by which transactions in the WESM will be scheduled and priced.
Furtherance to its mandate to establish an efficient and reliable electricity market, the DOE on 14 October 2016, issued Department Circular (DC) No. 2016-10-0014 which adopted certain enhancements to the current WESM design and operations. To operationalize the said DC, the PDM for the enhanced WESM design was then formulated and developed by PEMC and the proposed changes were discussed, deliberated and approved by the Rules Change Committee (RCC) and the PEM Board. Subsequently, on 20 March 2017, the DOE issued DC No. DC2017-03-001 approving the PDM for the New Market Management System (-œNMMS-) and directing PEMC, to file with the Commission the PDM petition for its approval.
On 17 May 2017, PEMC filed before the Commission its application for the approval of the new PDM for the WESM which is docketed under ERC Case No. 2017-042RC.
Thereafter, the Commission conducted the Expository/ Jurisdictional Hearings to officially commence the approval process of the instant case. The Hearings was conducted in Luzon, Visayas and Mindanao considering that the PDM will also be used for the upcoming establishment of WESM in the Mindanao grid. At present, the Commission is still conducting Evidentiary Hearings of the instant case.
SCOPE & OBJECTIVES OF THE TECHNICAL SERVICE
The technical assistance will equip the Market Operations Service-Spot Market Division (-œMOS-SMD-) personnel with proper evaluation and assessment tools for the review and approval of the PDM. The engagement of an expert aims to provide the Commission through the MOS-SMD the following:
1. Detailed Review and Assessment of the PDM Filing including, but not limited to the following:
a. Review and assessment the appropriateness of the enhanced PDM in compliance with the WESM Rules, WESM Market Manuals and other Rules and Resolutions promulgated by the Commission and policy issuance of the Department of Energy (DOE);
b. Identification of any flaws in the mathematical formulation of the methodologies contained in the PDM filing and recommend the necessary correction to address the same;
c. Review and assessment the appropriateness of the enhanced design in relation to the actions taken by the Market Operator (MO) to address previous audit findings;
d. Review and assess the enhanced PDM versus the existing PDM to determine the reasonableness of the same;
e. Analysis, detailed evaluation and recommendation regarding the appropriateness of the revisions made to the existing pricing mechanism as promulgated by the Commission, which include among others, the following:
-c Must Run Unit (MRU) Pricing;
-c Administered Price Determination Methodology(APDM);
-c Price Substitution Methodology;
-c Allocation of Net Settlement Surplus (NSS)
f. Review and assessment of the proposed Reserve Market including, but not limited to the following:
-c Comparison of Pricing Cost Recovery Mechanism (PCRM) for reserves as contained in the PDM filing versus the proposed PCRM under ERC Case No. 2007-004RC particularly the result of the study conducted by a third party;
-c Review and assessment of the appropriateness of the proposed reserve market scheduling and pricing methodologies in compliance with the WESM Rules, WESM Market Manuals, Rules and Resolutions relating to ancillary services promulgated by the Commission, DOE policies and issuances;
-c Analysis on whether the proposed methodology of trading reserves shall deliver the objectives of co-optimization and promote efficiency;
-c Recommendation including, but not limited to the following: 1.Categories of reserves to be traded; 2. Level of reserve to be contracted and traded; 3. Efficiency factor
-c Detailed analysis on whether the current mitigating measures and market rules on energy will be appropriate to the Reserves Market, albeit, recommendations should be provided.
g. Recommendation on possible mitigating measures, and price caps, in consideration of the effectiveness of the current mitigating measures in place on the new PDM;
h. Recommendation on issues and challenges currently experienced by stakeholders in the WESM (i.e, gaming on contracts, impact of VREs to pricing and scheduling; additional compensation methodology/make-whole payment;
i. Initial evaluation of the PDM application including the documentary submissions during the course of the hearings;
2. Technical evaluation of the enhanced MDOM and NMMS including, but not limited to the following:
a. Analysis on whether the enhanced MDOM formulations contained in the NMMS truly reflect and are in accordance with the revised provisions of the WESM Rules, WESM Manuals and other Rules and Regulations promulgated by the Commission and DOE policies and issuances;
b. Examination of the algorithms used in the MDOM software to determine the computational performance and accuracy of the mathematical formulation vis-A -vis the updated and revised WESM Rules, manuals other issuances and polices;
c. Identification of any flaws or inconsistency of the enhanced MDOM formulation and NMMS as compared to the PDM filing and recommend the necessary correction to address the same;
d. Concise and complete review of the certification/audit report by an independent 3rd party assessor
e. Analysis of the findings stated in the audit report specifically on the consistency and compliance of the MDOM with the revised WESM Rules, policies and issuances;
f. Identification of pertinent issues in the scope of audit and series of tests conducted in the engine; and
g. Recommendation of remedy to any inconsistency with the revised WESM Rules, policies and issuances
h. Comparison of the results of the trial operations and parallel operations with the findings of the Third Party Auditor, and assess whether the objectives of the PDM enhancements will be achieved as manifested by such results;
3. Other technical support as may be deemed necessary to meet the objectives of the technical which includes but not limited to the following:
a) Assessment of all the inputs from the stakeholders and addressing issues raised by concerned parties during the Hearings;
b) Attend the hearings during the project period;
c) Conducting technical discussions with MOS-SMD particularly before Hearings;
d) Recommendation on other documentary submissions yet to be made by the PEMC and/or other parties to enable the ERC to fully assess and evaluate the application;
e) Propounding specific questions relating to PDM filing specifically on the MDOM-s third party audit which will be used in the cross-examination of the technical experts to be presented by PEMC;
f) Presentation of initial findings to the Commission to seek comments and policy directives, drafting a report with incorporated comments and directives;
g) Submission of draft Report which shall include, but not limited to the benefits and consequences, of approving (or not) the proposed amendments, and how these can affect the lowering (or increasing) of prices in the market;
h) Conducting rigorous technical coaching/discussion with MOS-SMD personnel through with regard to preliminary assessment and evaluation; and
i) Other technical assistance which the Commission/MOS-SMD may deem necessary to meet the objectives of the project
QUALIFICATIONS OF TECHNICAL CONSULTANT
The consultant engaged on this task needs to be able to demonstrate Capability in the following areas:
A. Must have at least two (2) years- experience in providing technical analysis and examination of management systems or similar to the existing market management system of the WESM and/or other systems utilized by wholesale market operators/independent system operators in other jurisdictions;
B. Must have been previously engaged in providing consulting and technical assistance related to the review and examination of the algorithms used in the software to determine the computational performance of the mathematical formulation; and
C. Must have been able to provide technical support on the analysis of the operations of the co-optimization of the reserve and energy markets and the pricing and market outcomes thereof.
D. Must have demonstrable experience in understanding of the Philippine WESM particularly on issues arising in the pricing, dispatch and scheduling;
The consultant may form a team of experts to conduct and perform the technical deliverables. The composition of the team, if any, including details of the relevant expertise of team members, should be included in the proposal.
PROJECT DURATION
The timeframe for the assistance to be provided by the consultant including on-site services shall be for a total period of six (6) months. The regular on-site assistance shall include, but not limited to, attending the scheduled Hearings for the PDM case and the conduct of training/cadetship program for the enhancement of the technical capability of the MOS personnel.
DELIVERABLES
With reference to the scope and objectives above, the consultant shall produce deliverable including but not limited to the following:
1. Proposed methodology and detailed work program to meet the objectives and the scope of works which shall form part of the Inception Report;
2. Technical coaching and focused group discussions with MOS-SMD personnel which shall include but not limited on the following:
a. appropriateness of the price methodology as laid down in the revised WESM Rules;
b. pros and cons of the enhanced principles of the PDM versus the existing PDM principles;
c. overview of pricing methodologies and reserve markets being implemented in other jurisdictions;
3. Technical assistance to the Commission during the conduct of public hearings by providing propounding questions to the witnesses specifically on the expert witness who shall testify on the audit of the MDOM;
4. Technical advice on how the Commission can guard against violations of any rule or regulation governing the WESM-s enhanced design, including anti-competitive practices, abuse of market power and similar acts by any WESM participant;
5. Recommendation for other necessary additional data or report for the evaluation of the PDM filing;
6. Draft Report which includes sections discussing technical details that led to the final approval of the PDM filing including but not limited to the following:
a. Enhanced methodologies embodied in the new Price Determination Methodology;
b. Compensation of must-run units;
c. Methodology for the Administered Price Determination Methodology (APDM) to be used during market suspension or intervention;
d. Price Substitution Methodology to be applied in cases of large disparities in nodal prices arising from network congestion;
e. Methodology for the Distribution of Net Settlement Surplus
f. Pricing and cost recovery mechanism for reserves in the WESM;
7. All other forms of deliverables that will meet the aforementioned scope and objectives of the technical service.
TERMS OF PAYMENTS
The consultant shall be paid within thirty (30) calendar days after the acceptance of each of the milestone by the ERC-s designated/authorized signatories, broken down as follows:
Milestones Percent to total Contract Price
Phase 1 20%
- Methodology and detailed work program to meet the objectives and the scope of works
- Preliminary assessment of PDM Filing
- Draft Report providing initial findings and recommendations, including other additional data to be required from PEMC, if any.
- Preparation of questions to be propounded to technical expert/s presented by PEMC
- Conduct Technical Coaching/Lecture/
Briefing/Focused Group Discussion/ Training with MOS-SMD
- Identify issues raised and provide recommendations on how to address the same and other issues raised by intervenors/oppositors/MOS-SMD
- Attend evidentiary hearing particularly during the PEMC-s presentation of technical expert on the audit of the software/MDOM
Phase 2 60%
- Provide technical inputs and detailed evaluation on the application filed by PEMC
- Provide initial draft of Report embodying all the principles contained in the PDM as outlined in the deliverables.
- Presentation of the evaluation, findings and recommendations to the Commission
- Drafting and Finalization of the Final Report
Final Presentation to the Commission 10%
Submission of Final Report which shall be the basis of the Commission for its Decision and taking into consideration all comments and suggestions of the Commission during its final presentation 10%
Total 100%
The estimated number of days for each phase may slightly slide depending on the circumstances on the conduct of Hearings and evaluation process which cannot be predicted upon. In the event that the said application is submitted for resolution before the project duration term, the consultant shall continue to provide technical advice relative to the instant application, when necessary.
SERVICE CONTRACT ESTIMATED COST
The Approved Budget for the Contract is PhP4, 900, 000.00 inclusive of applicable taxes in the Philippines. The contract is funded through the supplemental budget to the General Appropriations Act (GAA) for the fiscal year 2017.
EVALUATION CRITERIA
1. Short Listing Criteria of Prospective Bidders
A. Experience Factor - Bidder must have experience in providing technical analysis and examination of management systems or similar to the existing market management system of the WESM and/or other systems utilized by wholesale market
B. Technical Qualification Factor - To establish the consultants expertise, they must have been previously engaged in consulting works involving provision of technical expertise in the examination of the algorithms used in the MDOM software to determine the computational performance of the mathematical formulation vis-A -vis established Market Rules; and
C. Firm Track Record Factor - the bidder must have been previously engaged in providing consulting and technical assistance related to the review and examination of the algorithms used in the software to determine the computational performance of the mathematical formulation.
Parameters Equivalent Point Score
A. Experience Factor 35%
B. Technical Qualification Factor 35%
C. Firm Track Record Factor 30%
Total 100%
(Note: Only the top 5 ranked Firms with at least 75% points based on the short listing criteria will be invited to submit the Technical and Financial Proposals. Should less than the required number apply for eligibility and short listings pass the eligibility check, and/or pass the minimum score required in the short listing, the BAC shall consider the same.
2. Bid Evaluation Criteria
Quality-Based Evaluation (QBE) will be used in the determination of highest rated bid. Under said evaluation, the Technical Proposal will be evaluated first to determine the highest rated bid. Then, upon approval by the HOPE, the Financial Proposal will be opened by the BAC.
A. Quality of personnel to be assigned to the project which covers suitability of key staff to perform the duties of the particular assignments and general qualifications and competence including education and training of the key staff;
B. Experience and capability of the consultant which include records of previous engagement and quality of performance in similar and in other projects; relationship with previous and current clients; and, overall work commitments, geographical distribution of current/impending projects and attention to be given by the consultant. The experience of the consultant to the project shall consider both the overall experiences of the firm and the individual experiences of the principal and key staff including the times when employed by other consultants; and
C. Plan of approach and methodology with emphasis on the clarity, feasibility, innovativeness and comprehensiveness of the plan approach, and the quality of interpretation of project problems, risks, and suggested solutions.
Parameters Equivalent Point Score
D. Quality of Personnel 30%
E. Experience and Capability of the Consultant 35%
F. Plan of Approach and Methodology 35%
Total 100%
Pre-bid Conference
DateTimeVenue
12/12/201810:00 AMMezzanine Floor, Pacific Center Building, San Miguel Avenue Pasig City
Closing Date : 2018-12-14

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