Palace intervention sought over DOE-ERC turf rivalry on power supply contracting

By Myrna M. Velasco – July 4, 2018, 10:43 PM
from Manila Bulletin

The aggrupation of the country’s renewable energy (RE) project developers is formally seeking the intervention of Executive Secretary Salvador C. Medialdea on the “escalating turf war” of the Energy Regulatory Commission (ERC) and Department of Energy (DOE) on the competitive selection process (CSP) policy on power supply contracting.

With DOE and ERC prescribing their own CSP rules, the RE developers as well as the off-taker distribution utilities (DUs) and electric cooperatives (ECs) are reportedly “getting extremely confused” as to which agency they shall be following given the intensifying tiff of these two relevant energy agencies.

The letter to Medialdea was reportedly elevated to Malacanang last week; and had been signed by RE representatives from the hydropower, biomass and solar sectors.

According to industry sources, the main policy question raised to the Executive Secretary is “about the conduct of Swiss challenge as a form of CSP because of the current policy differences set by the DOE and ERC.”

Renewable energy is seen as a thriving industry in the Philippines, especially with the recent issuance of the Renewable Portfolio Standards (RPS) rules for the sector. But with policies not getting harmonized at various government agencies, capitals cannot freely move for projects to be concretized, according to investors.

The RPS rules of the country targets RE capacity addition of more than 15,300 megawatts until year 2030 – with installation shoring up targeted by year 2020.

Nevertheless, RE investors averred that government policymakers as well as the industry regulator “must get their acts together, and cannot just let the industry hanging because they can’t agree how to implement policies.”

In fact even in the Green Energy Option Program (GEOP) for the RE sector, disagreements between ERC and DOE have also been brewing, primarily on licensing for those availing of this option.

The DOE has already given word previously that it would want to take the “licensing function” for the GEOP participants because of the legal predicament that the ERC has been confronting on its licensing role for retail electricity suppliers (RES) in the retail competition and open access (RCOA) policy.

The energy department noted that the temporary restraining order (TRO) of the Supreme Court on the RCOA Rules that had been enforced upon ERC could also prevent it from exercising licensing duty at the GEOP, hence, the DOE sees it prudent to at least assume that task so option for consumers cannot be impeded.

The DOE and ERC also have split stance when it comes to the RCOA policy, with the DOE submitting its own position to the Supreme Court as to the remedial measures it would want to pursue on that sphere of the restructured electricity sector.