By Lenie Lectura - December 14, 2017
https://businessmirror.com.ph/doe-targets-release-of-revised-csp-guidelines-by-next-year/
The Department of Energy (DOE) is targeting next year the release of a revised set of guidelines on Competitive Selection Process (CSP), a policy which requires distribution utilities (DUs) to hold competitive bidding for their supply requirements as against securing power deals via bilateral contracts.
“CSP process itself will be changed. We hope to issue new policy guidelines next year,” Energy Undersecretary Jesus Cristino P. Posadas said.
The CSP, through existing Department Circular 2015-06-0008, mandates competitive bidding between DUs and generation companies (gencos) in the sale of electricity through the mediation of a third-party expert.
Under the CSP, a distribution utility can only enter into a power-supply agreement with a genco after complying with the requirements of the process.
The requirement is for a DU to openly call for and receive at least two qualified bids from gencOs. 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.
Posadas said that the agency proposes “to cluster the power requirements” to reflect a more transparent manner of auction, similar to a policy being implemented in South America.
“The DOE will guide the DUs and gencos by area to determine how many megawatts are needed in a particular area. It’s like clustering,” Posadas said.
The details of the plan on CSP revision is yet to be finalized, but, Posadas said, the DOE’s thrust is “to implement a more objective platform for sourcing electricity in a given area.”
This move, he added, will open up the base load, mid-merit and peaking requirement for an area serviced by a DU, or electric cooperative.
“It’s a reversed auction of sort as buyers will be the ones that will now look for suppliers,” Posadas added.
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