December 13, 2015 8:45 pm by RITCHIE A. HORARIO, REPORTER
THE Department of
Energy (DOE) is drafting guidelines focused on key provisions of the
Competitive Selection Process (CSP), particularly those on aggregation and
third-party mediation.
“We are already
drafting the guidelines. We are looking at the circular issued by [former]
Secretary Carlos Jericho Petilla,” Energy Secretary Zenaida Monsada said.
The CSP requires the
holding of a competitive bidding between distribution utilities (DUs) and
generation companies in the sale of electricity through the mediation of a
third-party expert.
Under the
implementing circular, CSPs for the procurement of power supply agreements of
all DUs should observe aggregation for un-contracted demand requirements. The
term aggregation as used in the circular refers to the wholesale demand and
energy requirements of DUs.
Monsada said that
once the guidelines are completed, these will be submitted to the Energy
Regulatory Commission (ERC) for final approval.
She clarified that
since the CSP has already been implemented, “all power supply agreements (PSAs)
that were filed before November 4 are okay.” Those that were filed after
November 4 will be subject to the regulations that are being drawn up.
“We are preparing the
implementing guidelines as necessary pursuant to the circular issued by
Secretary Petilla, which includes the third party [provision] but, it’s really
up to the ERC as regulator on how or what they see fit,” she said.
Implementation of the
CSP in the procurement of power supply was earlier approved by the ERC as it
would improve transparency in the manner by which DUs buy electricity from
power generation firms.
According to the ERC,
the process assures that power supply is bought and passed on to consumers at
the least possible cost.
Under the CSP, a DU
may execute a power supply agreement with a generation company only after
successfully complying with requirements.
A DU must openly call
for and receive at least two qualified bids from generation companies. The DU
is not barred from entering into a contract for power supply.
The CSP further
requires that direct negotiations with other power suppliers be entered into
only after at least two failed CSPs.
With the
implementation of the CSP, the ERC will no longer allow the filing by DUs of
applications for PSA approval without compliance with the CSP requirements.
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