Published
By Myrna M. Velasco
The Energy Regulatory
Commission (ERC) is targeting to mandate “fixed bid price” in the tendering
process that distribution utilities (DUs) will be carrying out on their supply
procurements so they can efficiently serve captive customers or those end-users
that cannot yet exercise “power of choice” on securing their electricity
services.
That proposed rule is
part of the modifications in the competitive selection process (CSP) to be
instituted upon private distribution utilities and electric cooperatives on
their power supply contracting.
As preliminarily stated
by the ERC, the inclusion of a “fixed bid price”shall be integrated in the
terms of reference for the supply procurement bidding that the power utilities must
adhere to.
The new set of rules is
still at deliberation phase and the industry regulator has been soliciting the
inputs and comments of all affected and relevant stakeholders.
In a CSP or power
supply tendering activity, the privately owned DUs and ECs would generally
solicit offers or bids from power generators – and in past processes, the price
of the DU-solicited capacity had not been fixed.
The fortified rules, as
noted by the ERC, shall be applicable “to all DUs both on-grid and off-grid” –
and shall serve as the guiding fiat to all DUs and power suppliers, to include
the generation companies or the independent power producer administrators.
By reinforcing the
rules on supply contracting, the ERC opined that such could foster “fair
competition by providing equal opportunity to all relevant stakeholders and
pursues to result in a reasonable and competitive pricing of generation rate to
be charged to captive customers.”
Fundamentally, the
captive customers are those in the segment that cannot directly contract their
power supply requirement as the threshold of their consumption may not have
reached yet the competitive lever of retail supply set by industry regulators.
And to toughen the
“protective mechanism” for electricity consumers, the ERC is also advancing a
provision on “default contracting” – that way, the end-users can be continually
served with their electricity needs.
As asserted by ERC
Chairperson Agnes T. Devanadera, the proposed rules modifications contain “new
features or provisions that are meant to protect the consumers’ interests,” one
key stipulation of such would be the “blacklisting” of industry players that
will be in breach of rules.
The overarching target
of the new rules shall also be to fast-track the approval of power supply agreements;
and “to promote transparency in the selection and contracting of DUs while
promoting competition among generation companies.”
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