ERC sets fresh review of power bidding protocols

The Energy Regulatory Commission (ERC) will have to again review its revised guidelines on competitive bidding that distribution utilities must undergo before they can procure supply, citing a number of concerns gathered from stakeholders.

According to ERC Chair Monalisa Dimalanta, stakeholders commented on the competitive selection process (CSP) exemptions, maximum contract term and review timeline, among other concerns, during a series of consultations held in July and August.

CSP refers to the bidding process that power providers must undergo before supplying the electricity requirements of a distribution utility, such as Manila Electric Co.

The ERC said it was “compelled to conduct a thorough review and revision of the draft CSP guidelines,” and that it had notified the Department of Energy (DOE) on the need to consider the comments before officially issuing the revised policy.

In June, the DOE released the revised circular on the CSP policy and ordered the ERC to craft the implementing rules and regulations.

Among the circumstances that do not require CSPs are in times of emergencies. Distribution utilities and suppliers usually file emergency power supply agreements with the ERC to immediately address supply shortage.

The CSP has always been price-driven, wherein the contract is awarded to the lowest bidder.

Dimalanta noted earlier this year, however, that the process lacked a stronger criteria that would measure reliability and help prevent outages or supply shortage. She said ERC has been seeing the sudden termination of contracts due to the inability of generation companies to provide supply at a low price.

Had the power supply agreements undergone a more rigorous CSP, Dimalanta said that the companies involved could “stand firm” on their promises to deliver power to millions of consumers.

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.

The ERC has yet to disclose the timeline of its review. INQ