DoE tells power distributors to speed up compliance with competitive selection ruling

June 3, 2019 | 10:26 pm

https://www.bworldonline.com/doe-tells-power-distributors-to-speed-up-compliance-with-competitive-selection-ruling/

THE Department of Energy (DoE) has urged power distribution utilities (DUs) to expedite their compliance with a recent Supreme Court (SC) decision requiring a competitive selection process (CSP) in the bidding out of power supply agreements (PSA).

“All affected power industry players must catch up and push under the CSP, those stalled supply agreements for the next 23 years,” Energy Secretary Alfonso G. Cusi was quoted as saying in a statement on Monday.

The SC released early last month its decision compelling compliance with the CSP rules for all PSAs submitted by DUs to the Energy Regulatory Commission (ERC) on or after June 30, 2015.

Mr. Cusi said the government will ensure all parties in the energy sector covered by the ruling will comply.

Consultations with stakeholders are already underway, with the DoE also requiring all DUs to submit annual supply-demand projections to demonstrate the sufficiency of their supplemental power supply levels in the coming years.

The DoE said the high court’s ruling affirms the agency’s “longstanding conviction on the fundamental role of the CSP as a mechanism to ensure transparency and fair competition in the procurement of our power supply.”

“It was designed to protect the consuming public from power rate spikes, pass-on charges, and avert predatory practices,” Mr. Cusi added.

The SC further ordered that the power purchase cost after compliance with the CSP is to retroact to the date of the PSA’s effectivity, but in no case earlier than June 30, 2015, for purposes of passing the purchase cost on to consumers.

CSP requires affected contracts between power generation companies and distribution utilities to be subjected to price challenges, a process intended to cut electricity costs.

The ERC promulgated CSP in November 2015 but had to revise its effectivity date to April 30, 2016 through a resolution issued in March 2016, due to pressure from DUs and generation companies opposing the CSP’s application to existing power supply deals. — Janina C. Lim