No bidding yet for power contracts

The Department of Energy’s (DOE) new rule prescribing a bidding for power supply contracts may be implemented in phases to prevent market shocks, department OIC told reporters.

“It’s basically a policy directive; the implementor is the ERC (Energy Regulatory Commission). It’s up to ERC what would be mandatory and when. It is possible there would be a phased implementation (of the circular),” DOE officer-in-charge Zenaida Monsada said on the sidelines of an energy forum.

The new policy, DOE circular number DC2015-06-0008, is meant to promote least-cost power procurement for distribution utilities such as the Manila Electric Co. (Meralco) and electric cooperatives so that customers can enjoy cheaper power rates.

The circular says all power utilities and cooperatives must get power supply agreements or PSAs only through bidding.

This rules out bilateral agreements, which is presently a common practice. The new rule will affect 21 distribution utilities and 120 electric cooperatives nationwide.

The ERC will draft the implementing guidelines for the circular, Monsada said. Industry stakeholders, including generation companies and other suppliers must submit comments to the ERC until the end of the month, she added. After the comments have been collated, there will be focus group discussions and other forms of consultation.