DOE may seek CSP exemption on election-critical power contracts

by Myrna Velasco – February 19, 2016

from Manila Bulletin

With several power supply agreements (PSAs) getting delayed approvals due to the mandatory competitive selection process (CSP), the Department of Energy (DOE) indicated that it may seek exemption for those that may prove critical to electricity service during the election period.

“If it is needed, then we will seek for exemption, but only for contracts that will be critical to power service in electoral precincts,” Energy Secretary Zenaida Y. Monsada has noted.

Nevertheless, she qualified this will be done in coordination with the Energy Regulatory Commission (ERC), which has now the mandate on the CSP when it comes to rate regulation.

Monsada stressed that since the ERC is part of the task force ensuring stable power supply during the polling period, it will be correspondingly apprised with the inventory which particular electric cooperatives or distribution utilities will be affected.

The ERC previously issued to media the list of various DUs and power generation companies seeking exemptions on varied reasons.

It has to be culled though that some of them are batting for exemption for their short-term power deals as well as the contracts already nearing expiration – if only to sustain supply in their respective service areas.

Other contracts are those already signed prior to the November 6 cut-off date prescribed for the CSP mandate.

The initial response of the industry regulator is to deny exemption pleas, but it indicated that price challenge may be allowed based on a resolution that will be issued soon.

The CSP is a supply tendering scheme that intends to inject transparency in the power purchases of DUs, a policy that both the DOE and ERC opined to be beneficial for the Filipino consumers. Given the sudden implementation of the policy though, there are power supply contracts already getting affected in the process.