The Department of Energy and the Energy Regulatory Commission are studying the revision of the competitive selection process for the distribution sector to make it simpler to implement.
“In the distribution sector, the competitive selection process policy plays a crucial role in ensuring that distribution utilities are well-guided in contracting their power supply to their captive customers,” DOE Undersecretary Rowena Cristina Guevara said.
The DOE issued the CSP policy through a circular in 2015, mandating distribution utilities to undergo CSP in securing power supply agreements.
“CSP policy provides a clear, transparent, and fair supply procurement process that promotes competition and greater private sector participation in the provision of adequate generation capacity to meet the demand in the captive market, and full accountability of the DUs in the provision of affordable electricity prices to their captive market,” Guevara said.
She said DOE was revising the CSP policy and would start public consultation in the second week of April.
“When we come up with the new CSP, everyone will be happy. Because we made it easier to implement because right now everyone is having difficulty [on CSP] like [in] RA 9184 or the Procurement Act. We are staying away from that because this is private sector so why would you push for a government process,” Guevara said.
She said that under the CSP, there are some functions that went to the DOE when it should have been with the ERC.
“We should make this simpler, and then will make it such that control is with the DUs and the ERC. Those things I think will make our DUs happier,” she said.
ERC chairperson Monalisa Dimalanta said they were conducting their own review of the CSP given the recent failures of some power supply agreements.
“We saw last year how even recently awarded PSAs were tested, but they failed to withstand the challenges resulting in disputes and termination. So it compels us to evaluate the CSP rules to see what improvements can be made to avoid this to ensure commitments are delivered to consumers,” Dimalanta said.
The DOE promulgated Department Circular No. DC2018-002-0003 on Feb. 1, 2018, entitled “Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market”, as amended by Department Circular No. DC2021-09-0030 which took effect on Oct. 29, 2021.