Power retailers to start tender of sales deals

Starting April 30, electric utilities such as the Manila Electric Co. will have to conduct a bidding before forging sales agreements with generation companies.

This after the Energy Regulatory Commission decided it was no longer extending the transition period for distribution utilities to start contracting power supply through tenders as required by a new regulation.

ERC, in its Resolution No. 01, Series of 2016, said the implementation of ERC Resolution No. 13, Series of 2015, entitled “A Resolution Directing All Distribution Utilities (DUs) to Conduct a Competitive Selection Process (CSP) in the Procurement of Their Supply to the Captive Market” begins April  30, 2016.

Originally, the CSP was set to take effect toward the end of 2015.

DUs include private power retailers such as Meralco as well as electricity cooperatives.

“Distribution utilities and the generation companies are enjoined to comply with the requirement on the conduct of a competitive selection process (CSP) before entering into a power supply agreement (PSA) to promote transparency in the procurement of power and elicit the best price offers which would mean a lower pass-on charge to electricity consumers,” ERC CEO Jose Vicente B. Salazar said.

PSAs entered into by DUs and generation companies that are not yet covered by the CSP Resolution must be filed with the ERC before the close of the business hours (5 pm) on April 29, 2016.

“Afterwards, no PSA filed with the ERC will be docketed unless it has undergone a CSP,” the ERC said.

It may be recalled that the ERC had given distribution utilities more time to comply with rules on the competitive selection process (CSP) required for power supply agreements.