Understanding the Pakistan Budgeting Process: Basics and Key Insights
Â
Procurement Presentation
1. Power
Procurement
by
Nick Nichols
PhilRECA Board of directors
October 16, 2008
2. What ECs Pay NPC For
Cor. Agham Rd. Power Out of the
And
and Quezon Ave. Generator
Letâs ďŹrst put some things in perspective.
We pay for that complex in Diliman, and all the stuff that goes on inside - as well as pay for
the cost of power from the IPPs or the costs of owning and operating the NPC generation
So what goes on inside NPC? ...
3. What ECs Pay NPC For
Planning Procurement
Power Out of the
Generator
Contract Dispatch
Management Services
Well, itâs Planning, Procurement, Contract Management, and Dispatch services (i.e.
participating in WESM).
4. What ECs Pay IPP For
Power Out of the
Generator
The IPPs arenât going to do your planning and procurement for you ... unless you pay them to
do it.
5. What ECs Have to Do
Planning Procurement
WESM
Contract
Participation
Management
& Dispatch
These are also the things that make sense to do on a joint-action basis. Sharing the costs
and resources is one reason. Achieving market power (having a larger market footprint) is
another. Expanding your portfolio options is yet another (some projects just wonât ďŹt a single
EC).
6. Planning
Prepare Outlooks & Supply Portfolio
Forecasts Determination
Leads to a Procurement
Outlooks & Forecasts go beyond forecasting load. Itâs understanding market prices and
supply options. They are required to ďŹgure out what you want (i.e. the portfolio
determination). Canât do procurement unless you know what you want to procure & when.
7. Procurement
Prepare & Manage L
E Evaluate
Solicitations
G
A Regulatory
Negotiations
L Approvals
Procurement involves a lot of things. The Evaluation includes understanding just what
uncertainties (pricing and availability) you are exposing your customers to.
8. But Donât Forget
Planning Procurement
You have to do all
of these
WESM
Contract
Participation
Management
& Dispatch
Donât forget âProcurementâ is just one aspect of what you will need to be doing in order to
get ... -->
10. What We Did on Panay
First
Formed a Consortium via
MOU
To share the costs of consultant. Identify point team (Consortium Board) for addressing
issues, interface with IPPs. (Limited tech assistance from NRECA in preparatory phase.)
11. What We Did on Panay
Assessed aggregated load
requirements
Assessed extent to which existing resources
and contracts would serve those requirements
Determined exposure Estimated impact of
to market that exposure
12. Portfolio Needs
Indicative
Some Peaking. Huge Base load and Intermediate load Exposure to market.
13. What We Did on Panay
Within Consortium, Keep
Transparency High
Get Consensus Every Step
âŁRFO Design
âŁSchedules
âŁBidder Interactions
âŁEvaluations & Short Lists
14. RFO Basis
Used simple, fundamental objectives
to guide bidders:
1. Approximately 90 MW of Base &
Intermediate Requirements
2. Start in January 2011
3. Looking for long-term contract
Pricing structures up to bidder. One requirement is that bidder must be willing stick to
fundamentals of offer during negotiations for ESA. Set up web site for disseminating
information re RFO and handling Q&A.
15. RFO Basis
Estimated each ECs share
of 90 MW
Consortium would
negotiate the ECA as agent
for all ECs
ECA would be a bi-lateral
with each EC
16. RFO Basis
Then ...
Let The Competition
Sort It Out
17. Process
First ...
⢠Do the Planning
⣠Identify market exposure
⣠Identify what you want to procure
19. Process
⢠Prepare and vet the RFO
* = Items we didnât do in Panay process.
20. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
* = Items we didnât do in Panay process.
21. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
⢠Establish Public* Website and eMail Box
for Bidder Communication
* = Items we didnât do in Panay process.
22. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
⢠Establish Public* Website and eMail Box
for Bidder Communication
⢠Prepare Data CD*
* = Items we didnât do in Panay process.
23. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
⢠Establish Public* Website and eMail Box
for Bidder Communication
⢠Prepare Data CD*
⢠Announce & Release RFO
* = Items we didnât do in Panay process.
24. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
⢠Establish Public* Website and eMail Box
for Bidder Communication
⢠Prepare Data CD*
⢠Announce & Release RFO
⢠Hold Bidders Conference
* = Items we didnât do in Panay process.
25. Process
⢠Prepare and vet the RFO
⢠Prepare Your Model ESA*
⢠Establish Public* Website and eMail Box
for Bidder Communication
⢠Prepare Data CD*
⢠Announce & Release RFO
⢠Hold Bidders Conference
⢠Respond to Bidder Q&A
* = Items we didnât do in Panay process.
26. Quantitative
⢠Market Valuation
⢠Market Value = BeneďŹts - Costs
⣠BeneďŹts = Capacity, Energy, A/S
⣠Costs Include Credit Enhancements,
Transmission, A/S, as well as Price
⢠LRAC
28. Procurement
Process
WESM
Contract
Participation
Management
& Dispatch
Donât forget âProcurementâ is just one aspect of what you will need to be doing in order to
get ... -->
29. Also Donât Forget
You Need To
Planning Procurement
Get Cost
Recovery For
All of This!
WESM
Contract
Participation Itâs Not in the
Management
& Dispatch ERC Benchmarks