ERC to decide on power supply deals next month

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THE Energy Regulatory Commission (ERC) will make a decision next month on which distribution utilities and electric cooperatives will be given power supply agreements (PSAs).

Implementing the competitive selection process (CSP), a Department of Energy (DOE) circular, is the subject of regulatory approval.

“We are still targeting to meet the October 27 deadline,” ERC chair Jose Vicente Salazar said. “Our intention is to have a decision by that time . . . So either we go on with the CSP or set that aside.”

The plan is to conduct the consultations from the middle to the third week of October.


“We have to consider the position of all concerned parties,” Salazar said.

“We want to come up with a decision that is acceptable to all the parties and at the same time achieve the objective of the DOE circular,” he added.

The circular notes that distribution utilities will secure supply agreement only through a CSP conducted by a third party recognized by the ERC and DOE.

In the case of electric cooperatives, the third party must be recognized by the National Electrification Administration.

The qualifications or terms of reference of the third party have yet to be developed.
Industry stakeholders believe that the circular will impact on the distribution utilities with sister companies that generate power.

The 2001 Electric Power Industry Reform Act allows cross-ownership between distribution utilities and generation firms but sets a certain limit on the percentage of ownership.

Power distributor Manila Electric Co. (Meralco) proposed to have CSP implemented on voluntary basis. That way the intended benefits of the selection process can be maximized, Meralco President Oscar Reyes earlier said.

The DOE circular mandates all distribution utilities to secure PSAs only through a competitive selection process to ensure that power supply is reliable, secure and of desired quality.

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