DoE chief vows CSP integrity, completion
Credit to Author: JORDEENE B. LAGARE| Date: Fri, 24 May 2019 16:46:31 +0000
All the necessary measures will be taken to uphold the recent decision of the Supreme Court (SC) requiring all power supply deals to undergo competitive bidding, the Department of Energy (DoE) said on Friday.
ENERGY Secretary Alfonso Cusi revealed he is now compelling distribution utilities (DUs) including the Manila Electric Co. (Meralco) to conduct a competitive selection process (CSP) in power supply agreements (PSAs) affected by the SC ruling.
“The highest court of the land has unequivocally spoken. Thus, in adherence to the SC’s judgement, we call for the exigent conduct of CSP [competitive bidding process] for the PSAs of DUs, which include electric cooperatives and private corporations like Meralco,” Cusi said in a statement on Friday.
The Department of Energy (DoE) will closely oversee the implementation of the CSP to ensure that the exercise “is conducted in an open, transparent, effective, efficient, and equitable manner.”
For its part, the Energy Regulatory Commission (ERC) will work alongside the DoE by enforcing the relevant policies and rules governing CSP in power deals.
“However, should the process grossly fail, the DOE will not hesitate to enact all necessary measures to uphold the integrity and completion of the CSP,” he added.
Cusi said the Energy department will now be calling for immediate consultative meetings with Meralco, their project partners, and those smaller contracts which have been affected by the high court’s ruling.
Meralco has power deals with seven generation companies covering more than 3,500 megawatts (MW) of supply. These are Mariveles Power Generation Corp., Central Luzon Premiere Power Corp., Redondo Peninsula Energy Inc., Atimonan One Energy Inc., St. Raphael Power Generation Corp., Panay Energy Development Corp., and Global Luzon Energy Development Corp.
The DoE is also asking all DUs to submit annual supply demand projections for the next three years, and from 2023 to 2030 to ensure sufficient power supply and meet their respective franchise obligations.
In its May 3, 2019 decision, the SC ruled that all PSAs signed on or after June 30, 2015 must undergo CSP for the purchase of electricity by distribution utilities (DUs).
CSPs are designed to protect consumers, and rules under them require DUs to get at least two offers for power supply before awarding a deal, ensuring that consumers get the least cost.
The verdict invalidated the resolutions issued by the ERC postponing the CSP requirement in October 2015 and March 2016, respectively — which the high tribunal regarded as grave abuse of discretion amounting to lack or excess of jurisdiction.
Cusi said the department “widely welcomed” the SC resolution mandating all power entities to comply with the DoE’s CSP circular released in 2018.
“The SC ruling reaffirms our 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,” he added.
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