ERC defers effectivity of competitive selection process to April 30

posted March 22, 2016 at 11:15 pm by Alena Mae S. Flores

http://thestandard.com.ph/business/202309/erc-defers-effectivity-of-competitive-selection-process-to-april-30.html

The Energy Regulatory Commission issued a new resolution moving the effectivity of the competitive selection process on the procurement of supply of distribution utilities and electric cooperatives to April 30 this year.

ERC, in a resolution dated March 15, 2016, said since the publication of the CSP Resolution on November 6, 2015, the commission received letters from stakeholders raising concern on the constitutionally of the process.

The stakeholders sought clarification on the implementation of the CSP and its applicability to the renewal and the extension of the power supply agreements, requested a determination of the accepted forms of CSP and submitted grounds for exemption from its applicability.

“After judicious study and the consideration of the different perspectives raised in the aforementioned letters, with the end in view of ensuring the successful implementation of the CS for the benefit of the consumers, DUs and gencos, the commission has resolved to allow a period of transition for the full implementation of the CSP resolution...,” ERC said.

The resolution was signed by all members of the commission, namely chairman Jose Vicente Salazar and Gloria Victoria Yap-Taruc, Afredo Non, Josefina Patricia Magpale-Asirit and Gernimo Sta. Ana.

ERC said all power supply agreements executed on or after April 30, 2016 will be required, without exception, to comply with the provisions of the CSP resolution.

The regulator said the CSP should comply with the terms of reference requirement and that there should be at least two qualified bids for the selection process to be considered successful.

It said supply agreements approved by the commission or filed with the ERC before the effectivity of the resolution may have one year automatic renewal or extension for a period of not exceeding one year from the end of their respective terms.

It added that “automatic renewal clauses or extension of supply agreements shall no longer be permitted” upon effectivity of the resolution.

ERC, meanwhile, plans to issue the definitive guidelines for the mandatory implementation of the competitive selection process.

Taruc earlier said the definitive guidelines had not yet been released.

“We issued a resolution on November 2015. One of the sections said pending the issuance of a definitive guidelines for CSP, the DU might undertake their own CSP,” Taruc said. 

She said consultations would be conducted with the private sector on the CSP guidelines.

Taruc, however, said it was still not clear whether the ERC would include the   third party provision as proposed by the Energy Department.

ERC last year declared CSP as mandatory but did not endorse the delegation of a third party to conduct the process.