ERC tells 100 DUs, co-ops to show proof of CSP

By Lenie Lectura - October 21, 2019

https://businessmirror.com.ph/2019/10/21/erc-tells-100-dus-co-ops-to-show-proof-of-csp/

The Energy Regulatory Commission (ERC) directed more than 100 distribution utilities (DUs) and electric cooperatives (ECs) to submit a certification from the Department of Energy (DOE) attesting to their compliance with the government’s competitive selection process (CSP) rules.

ERC Spokesman Rexie Digal said the commission’s directive was sent to a total of 117 DUs/ECs.

One of ERC orders directed Pangasinan III Electric Cooperative, Inc. (Panelco) and SMC Consolidated Power Corp. “to comply with the pertinent rules and regulations of the DOE relative to the CSP requirements pursuant to the Supreme Court in the ABP [Alyansa Para Sa Bagong Pilipinas Inc.] case, and to submit the necessary DOE Certification attesting the parties’ compliance thereto.”

“Such certification should be submitted within 90 days from receipt of Panelco III of this order,” the commission added.

Digal said all 117 DUs/ECs received letters with the same content.

ERC Chairman Agnes VST Devanadera said the DOE certification could be done several ways.

“It’s really up to the DOE. It may or may not be a certification. It will depend on the DOE. It’s just a way for us to have a reference that a CSP, based on the DOE rules, was indeed conducted,” said Devanadera.

Upon the conduct of the CSP, the DUs/ECs will sign a power-supply agreement with the power generation company (genco). The PSA must be reviewed and approved by the ERC. The DOE certification is one of the ERC requirements for the PSA approval.

The agency recently convened industry stakeholders to discuss how they should proceed after they have concluded the CSP.

“It was mainly an update on the status of the PSAs that were affected by the SC  ruling. ERC said that they issued on September 11 orders to the DUs/ECs with affected PSAs, directing them to comply with the SC ruling.

“This meant going through CSP using DOE’s CSP guidelines. So, ERC walked through the DOE’s CSP guidelines with the audience [gencos and DUs/ECs],” said Lawrence Fernandez, Manila Electric Co. head of utility economics, in a text message. Meralco was one of the DUs that attended the meeting.

The ERC has so far received 57 motions for reconsideration of its September 11 order, and is awaiting the responses of the other DUs/ECs/gencos, added Fernandez.

Meralco has seven PSA applications affected by the SC ruling. However, it withdrew six PSAs.

“We have one PSA affected, with Panay Energy. It was provisionally approved and already being implemented. But the other six PSAs that were the subject of the SC ruling were already withdrawn,” said Fernandez.

It can be recalled that the SC earlier required all PSAs forged after June 30, 2015, to undergo CSP.

The CSP requires DUs to hold competitive bidding for their supply requirements as against securing power deals via bilateral contracts. This is meant to ensure transparency and fair competition.

The SC decision stemmed from allegations that the ERC gave due preference to Meralco by extending the deadline for compliance of CSP.