The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) are keen on adopting amendments to the competitive selection process (CSP) when contracting power supply agreements to avoid any more disputes in the future.
Under the new CSP, a distribution utility (DU) may only sign a power supply agreement (PSA) with a generation company only after calling for and receiving at least two qualified bids from the generation companies and will only be allowed to have direct negotiations with other power suppliers only after at least two failed bidding events.
However, there have been more recent CSP agreements submitted for court intervention due to appeals for temporary change in terms and rates.
Energy Undersecretary Rowena Guevara at the Philippine Electric Power Industry Forum in Manila, said that under the original set of CSP rules crafted under the previous administration were regulatory functions given to the DOE but for reversion back to the ERC.
“That is one that will really make their lives easier. At the end of the day you will still go to the ERC for the rates. So we said maybe we should make this simpler and then we’ll make it such that control is with the DUs and the ERC so I think those things will make our DUs happier,” Guevara said.
According to her, the existing CSP rules are comparable to the strict provisions of the Government Procurement Reform Act, and that much like the ERC the DOE does not want to subject private sector participants to a process meant for government offices.
Guevara said a public consultation on the proposed changes in the CSP is scheduled on the second week of April and actual changes are seen adopted by May 26.
Monalisa Dimalanta, ERC chairperson, acknowledged having been also “compelled” to evaluate the CSP rules for the benefit of consumers.
“We saw last year how even recently awarded PSAs were tested but failed to withstand the challenges, resulting in disputes and termination. So, it compels us to evaluate the CSP rules to see what improvements can be made to avoid these (disputes) to ensure the commitments are delivered to consumers,” Dimalanta said.
