September 24, 2019 | 12:01 am
THE Energy Regulatory
Commission (ERC) will ensure that distribution utilities that entered into a
power supply agreement (PSA) with a generation company have opted for the least
cost offer during the bid process, the agency said on Monday.
“At the moment, we
cannot as yet determine or confirm whether the proposed rate in the Meralco PSA
adverted to was indeed the least cost,” said ERC Chairman and Chief Executive
Officer Agnes VST Devanadera in a statement.
She was reacting to
news reports saying the ERC was being urged to confirm whether the competitive
selection process (CSP) recently conducted by Manila Electric Co. (Meralco)
indeed resulted and was awarded to the least cost bidder.
Ms. Devanadera said
once the Meralco PSA application has been filed, the ERC will conduct a
thorough evaluation to ensure that the proposed rate in the PSA is the least
cost.
The CSP came after the
Supreme Court affirmed its decision in July 2019 requiring all PSAs that have
been submitted to the ERC from June 30, 2015 need to undergo the competitive
bidding.
The process is a form
of competitive public bidding for the purchase of electricity by the
distribution utilities (DUs). The CSP requirement in the power sector is aimed
at ensuring a fair, reasonable, and cost-effective generation charge for
consumers, under a transparent power sale mechanism between the generation
companies and the DUs. The CSP was promulgated for the protection of the
consuming public, the ERC said.
Ms. Devanadera said her
office will require the submission of pertinent documents from the distribution
utilities. The filings will show proof that the CSP they had undertaken in
securing their power supply from the generation companies adhered to the “least
cost,” she added. — Victor V. Saulon
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