ERC Okays 21 Supply Deals

Manila Bulletin

August 8, 2011, 12:46am

MANILA, Philippines — The Energy Regulatory Commission (ERC) has granted provisional approval to about 21 supply deals, framed as letters of agreement (LOAs), entered into by the Power Sector Assets and Liabilities Management Corporation (PSALM) with various distribution utilities.

The ERC has issued three separate rulings for the various LOAs covering PSALM’s supply pacts with 19 electric cooperatives and private DUs in Visayas; and two others in Mindanao.

The industry regulator noted that the LOAs “contained amendments in the contracted energy from the original transition supply contracts (TSCs).”

For Mindanao, the approved LOAs are for the supply of electricity to Lanao del Sur Electric Cooperative Inc. (LASUREO) and Zamboanga City Electric Cooperative Inc.

The electric coops in the Visayas, which can now draw power supply based on their approved LOAs or TSCs with PSALM, include the: Biliran Electric Coop; Northern Samar Electric Coop; Samar I Electric Coop; Visayan Electric Company; Central Negros Electric Cooperative; Leyte I Electric Cooperative; and Leyte II Electric Cooperative.

The others are electric coops covering Antique; Cebu I and II; Iloilo II and III; Leyte III, IV and V; Negros Occidental, Negros Oriental I; Samar II and VMC Electric Coop.

The ERC emphasized that the grant of provisional approval for the LOAs, or the corresponding contract to supply electric energy (CSEE) or transition supply contracts (TSCs) are in order; “to ensure continuous supply of power at a fairly stable cost to the DUs which will ultimately redound to the benefit of the end-users.”

Power industry players, especially on concerns relating to tariff on the sale of electricity, would have to go through regulatory approvals to ensure that the rates being charged to consumers are justifiable.

Beyond the LOAs it entered with the DUs though, PSALM had supply agreements which were also repackaged as letter-agreements, but the company had not submitted them for regulatory approvals.

These covered the supply deals it entered into with the two buyers of privatized plants in the Visayas. The LOAs already lapsed in 2010.

Given the expiration of the deals, PSALM has not expressed any willingness to bring them before the scrutiny of the industry regulators; and given its way, it might prefer tossing this issue into oblivion. (MMV)