Competitive selection ruling deferred by ERC


The Energy Regulatory Commission (ERC) has deferred issuing a decision on the mandatory implementation of the competitive selection process (CSP) for distribution utilities (DUs).

ERC Chairman Jose Vicente Salazar said they still need to meet with the Department of Energy (DOE) regarding the matter.

“Upon consultation with the members of the commission, we will defer any announcement on the competitive selection process,” Salazar told reporters in a text message.

Salazar said they are set to meet with DOE officials, upon the request of Energy Secretary Zenaida Monsada, on November 4.

“We shall make the appropriate announcement on the matter after the said meeting is held,” he added.

The DOE and ERC were supposed to issue the CSP guidelines by October 27 after conducting public consultations with various stakeholders.

The CSP, which was issued by the DOE through Department Circular 2015-06-0008, mandates the holding of a competitive bidding between DUs and generation companies in the sale of electricity through the mediation of a third-party expert.

Mandatory implementation of the CSP for distribution utilities could spur higher electricity rates as it may cause generation rates to shoot up.

The DOE’s circular is being opposed by the country’s largest power distributor Manila Electric Co. (Meralco).

Meralco warned that the DOE circular would ultimately result in “increased generation charges to the damage of consumers” because it does not promote the interest of the public.

The circular, Meralco added, also violates the right of the DUs to choose how to comply with their least cost obligation under the Electric Power Industry Reform Act (EPIRA) and their franchises.

Meralco said that under the CSP, it will be difficult, if not impossible, for DUs not to contract with a winning bidder that does not have a track record.

Meralco’s position was supported by CitizenWatch, an independent network of citizen rights advocates, saying that the CSP would only cause power rates to go up.

CitizenWatch said that the CSP will not work in an environment where there are not enough power generation players and will be prone to abuse, resulting in higher cost of electricity.

Because of this, CitizenWatch urged the DOE and ERC to suspend the implementation of the circular.

Instead of implementing CSP, the group urged the DOE to “confront the real root of the country’s perennial energy woes.”

The group also raised doubts about the provision on the selection of third-party experts.


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