February 22,
2018 | 8:52 pm
THE
Department of Energy (DoE) said it will intervene and review existing power
supply contracts with an automatic renewal clause to block any move to
circumvent the rules on competitive selection process (CSP).
“The
rate would still be negotiated. We will look at the rate. They can have an
automatic renewal but DoE will still look at what they are automatically
renewing,” Energy Secretary Alfonso G. Cusi told reporters in view of the
recent issuance of the department’s CSP circular.
“They
might be renewing at P5 per kilowatt-hour when the ongoing rate is already P3,”
he said.
Mr.
Cusi said the renewed power supply contract will also need clearance from the
Energy Regulatory Commission (ERC), thus the rates would not be automatically
carried over to the new agreement.
“That
would also go through the ERC. For us, if there is an automatic renewal, we
have an intervention for that,” he said.
Redentor
E. Delola, DoE assistant secretary, said the department also monitors existing
and expiring power supply agreements (PSAs), thus none can be renewed
automatically.
Mr.
Delola said that a year before a PSA expires, the DoE knows which ones are
going to be renewed or extended.
“We
can ask the ERC to review these contracts,” he said.
In
a circular issued earlier this month, the DoE required power generation
companies as well as new power providers to secure supply of electricity
through a competitive bidding or CSP. The process is open to participation by
any interested party and requires three process: advertisement or publication;
pre-bid conference; pre-qualification; bid evaluation; post-qualification; and
the award of the power supply contract.
Department
Circular No. DC2018-02-0003 also calls for the distribution utilities, through
their boards , to establish an independent third-party bids and awards
committee to spearhead and manage the CSP.
The
circular also set down the rules covering the membership of the five-member
committee, two of whom are to come from the captive customers that are not
directly or indirectly related or affiliated to the distribution utility.
Previously,
the DoE and the Energy Regulatory Commission required the conduct of a CSP but
did not give out a detailed guideline of what the process should entail. — Victor
V. Saulon
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