Advertisement

DoE says rules in place for competitive selection after high court ruling

Font Size

power lines

THE Department of Energy (DoE) is not keen on issuing directives to power generation companies (gencos) and distribution utilities (DUs) that were affected by the Supreme Court decision requiring all power supply contracts forged after June 30, 2015 to undergo a competitive selection process (CSP).

“It’s simple. We already have the competitive selection process policy. Section 2 provides for the exemptions, all the rest gives the rules, so they have to have the third-party bids and awards committee already. They should beef up their power supply procurement plan, and if there’s a need [for] emergencies, they have Section 2 for the exemptions [from] the CSP,” said DoE Undersecretary William Felix B. Fuentebella in an interview.

On May 6, 2019, the Supreme Court’s public information office said the tribunal ruled that power supply agreement (PSA) applications submitted by the DUs on or after June 30, 2015 were to comply with the CSP in accordance with DoE Circular No. DC2015-06-008.

The circular required all DUs to undergo CSP, a form of competitive public bidding for their purchase of electricity from gencos, in securing PSAs. It became effective on June 30, 2015 after its publication.

The competitive public bidding requirement 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 court 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 to consumers.




Its ruling set aside Resolution 13 of the Energy Regulatory Commission (ERC) that set the cut-off date for the compliance of the CSP requirement to Nov. 7, 2015. The agency’s resolution postponed the implementation of the provisions of the DoE circular by 130 days.

“The policies are already in place. They just have to follow the policy,” Mr. Fuentebella said.

“We have to look at the original decision. ’Yun na lang ang hinihintay ko (that’s all I’m waiting for), but most of the decisions are prospective.”

On May 10, the ERC said it had summoned the concerned electric power industry stakeholders and required them to submit information that will enable the agency to assess the possible impact of the SC decision.

It required the submission of documents by May 15, 2019, including the details of the procurement process of the affected contracts along with supporting papers, and a list of existing major or critical loads to be affected.

It also asked for other local or locational circumstances to be considered in relation to supply stability, actual monthly amount paid for the contracts involved, and actual historical customer profile from June 2015 to December 2018.

The ERC also asked stakeholders to submit their projected power supply-demand scenario from 2019 to 2026.

The agency said it had held initial discussions with the DoE earlier last week to collaborate on the possible measures that can be undertaken in order to manage the impact of the Supreme Court ruling to the consuming public.

“We assure the public that we will do everything within the Commission’s mandate to protect the welfare of the consumers relative to the impact of the recent Supreme Court decision. We are considering and exploring various scenarios to address the impact of the Supreme Court ruling,” ERC Chairperson and Chief Executive Officer Agnes VST Devanadera said. — Victor V. Saulon