by Myrna Velasco March 22, 2016
After several complaints and
requests for clarifications on the policy, the Energy Regulatory Commission
(ERC) has finally moved to April 30 this year the mandatory implementation of
the competitive selection process (CSP) on power supply contracting for distribution
utilities.
This effectively provides transition
on the policy which was first enforced by a Resolution dated October 20 last
year. Nevertheless, myriad of questions were raised as the edict hobbled some
power project implementations in the industry.
The ERC noted that it received
“several letters from stakeholders which raised issues on the constitutionality
of the effectivity of the CSP resolution.”
Additionally, the affected industry
players “sought clarification on the implementation of the CSP and its
applicability to the renewal and extension of the PSAs (power supply
agreements).”
The stakeholders further requested
for definitive guide on the accepted forms of CSP that they must execute when
entering into supply contracts with DUs; and what are the possible exemptions
to the rules.
In its newly issued resolution, the
regulatory body emphasized that the CSP resolution’s effectivity is restated to
be April 30, 2016.
It stipulated further that “all PSAs
executed on or after the said date shall be required, without exception, to
comply with the provisions of the CSP Resolution.”
The ERC similarly upheld “the
requirement of at least two (2) CSP qualified bids for the CSP to be considered
successful.”
On requirement of CSP renewals, the
Commission qualified that this could only be done once at least a year from the
end of their respective terms.
Beyond that, the ERC stated that
“automatic renewal clauses or extension of PSAs shall no longer be permitted
upon effectivity of (the) Resolution.”
It has to be recalled that several
power generation companies and electric cooperatives sought exemption from the
conduct of CSP on their supply deals that lapsed immediately after the issuance
of the October 20 resolution.
In that preliminary edict, the
cut-off on contracts that shall not go through CSP process had been November 6,
2015 for those that have not been filed yet with the Commission.
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