ERC finds more defective CSP-exempt power supply agreements

by Myrna Velasco September 13, 2016

http://www.mb.com.ph/erc-finds-more-defective-csp-exempt-power-supply-agreements/

The Energy Regulatory Commission (ERC) will likely junk more “defective” power supply agreements (PSAs) that were entered into by relevant parties prior to the enforcement of the competitive selection process (CSP) matrix in the deregulated electricity sector.

ERC Commissioner Alfredo J. Non has noted, in an interview with reporters, that there are several contracts that were not actually firmed up prior to the original deadline of November 6, 2015.

He explained that under the guidelines they issued, the extended deadline of April 30, 2016 had not been intended for parties to negotiate and sign new supply contracts beyond the original deadline.

The time leeway, he added, was only for the filing of the contracts already signed on or before November 6, 2015 – but not for PSAs entered into after that.

According to ERC spokesperson Floresinda B. Digal, “there were 11 applications with PSAs executed after November 6, 2016 that were found to have defects in their verification and certification against forum shopping.”

The ERC earlier released the names of the initial PSAs with projects having no environmental compliance certificates (ECCs), but Non indicated there are additional applications that they will foreseeably thumb down.

“We deferred from November 6, 2015 to April 30, 2016 (the filing of CSP-exempt contracts), but that was only intended for power supply agreements that were delayed in their actual filing with the Commission,” the ERC official said.

He stressed the supply deals that manifestly just dodged on the original cut-off date, will have to be tossed out.

Non emphasized that when they verified the PSA applications, the Commission discovered that some of the contracts were negotiated after the bona fide deadline date of November 6, 2015.

“What they (power companies and distribution utilities) are saying is that: We filed before April 30 (2016), but we said, no! We have to determine whether or not the contract was actually signed on or before November 6 (2015),” he said.

After the prescribed deadlines, all PSAs will already have to go through CSP or auction processes before any contract shall be entered into by servicing distribution utilities.