Overhaul of power bidding guidelines in the works

The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) are set to release new guidelines on the competitive selection process (CSP) for the country’s power sector to protect consumers from sudden increases in power rates and power interruptions due to canceled supply deals.

In a recent forum, Energy Undersecretary Rowena Guevara said the two power regulators were reviewing the CSP and that they would start public consultations this week.

The new CSP policy is set to be released in May, according to the ERC.

The CSP refers to the bidding process that power providers must go through before supplying the electricity requirements of a distribution utility.

The CSP policy was first issued in 2018 to provide a “clear, transparent, and fair supply procurement process that promotes competition and greater private sector participation” in meeting the country’s power demand.

Policy review

The ERC noted, however, that despite clear policies, the commission saw the sudden termination of power supply agreements (PSAs), potentially exposing consumers to higher electricity rates.

“[The CSP policy review] is an opportunity for us to really do an introspection and see whether there is something wrong with the process, or if there’s something we can improve on,” said Monalisa Dimalanta, chair of the ERC.

If a PSA undergoes a more rigorous CSP, Dimalanta said the companies involved could “stand firm” on their promises to deliver power for millions of consumers.

While the CSP is largely price-driven—wherein the contract is awarded to the lowest bidder—Dimalanta stressed that the process lacked stronger criteria that would measure reliability and help prevent outages or supply shortage.

The ERC, under Resolution No. 10, Series of 2020, allows only a certain number of days for outages depending on the types of power plant technologies, such as coal and gas.

This is based on existing power reliability indices prescribed by the ERC to ensure power security for consumers.

The Philippine Independent Power Producers Association, however, recently recommended the revision of the ERC provision to exempt major power plant maintenance and overhauls. INQ