Philippines: CSP is a safety net to promote consumer interest - ERC

Philippines: CSP is a safety net to promote consumer interest - ERC

THE ENERGY REGULATORY COMMISSION (ERC) REITERATED ITS COLLECTIVE DECISION TO
EXTEND THE EFFECTIVITY OF THE COMPETITIVE SELECTION PROCESS (CSP) AS AN
ATTEMPT TO ADDRESS CONCERNS BY POWER INDUSTRY PARTICIPANTS WHO HAVE
ACCOMPLISHED BUT FAILED TO SUBMIT THEIR POWER SUPPLY AGREEMENTS (PSAS) TO
THE REGULATORY BOARD.

During a public hearing at the House Joint Committees on Good Government and
Public Accountability last July 4, ERC OIC and Commissioner Alfredo Non
clarified the intention of the CSP and its much-awaited enactment in light
of its alleged partiality to Manila Electric Co.'s (Meralco) power supply
agreements of its seven coal-fired power plants.

"The ERC developed and promulgated the CSP as an additional safety net to
promote consumer interest, though it is not a mandatory requirement under
the EPIRA (Electric Power Industry Power Reform Act)," ERC OIC and
Commissioner Alfredo Non said, adding that the imposition of the CSP does
not mean the ERC is abandoning the supposed evaluation process nor is it
related to the approval of PSAs.

Non also said that the regulatory board was forced to move the effectivity
date of the CSP via a Resolution in March 2017 to make leeway for a
transition period so as not to defy any legal complexities between the
parties as a result of its implementation.

The delay of the CSP, which the ERC enacted in November 2015 until April
2016, led to the upset of many distribution utilities (DUs) and generation
companies, raising issues on the legal implications of the CSP to existing
PSAs, whether due for renewal, submitted for approval or otherwise already
executed.

Earlier, the House of Representatives called for a probe under House
Resolution No. 566, filed by Bayan Muna Rep. Carlos Zarate, to investigate
on the alleged irregularities in the implementation of the government's
competitive selection process, which to have seemed to have benefited
Meralco and its affiliates.

Zarate said the ERC was supposed to implement the CSP scheme as early as
November 2015, as mandated by a Department of Energy circular imposing a
competitive bidding for power supply, as opposed to negotiated contracts.

Non and his fellow ERC commissioners are currently charged with criminal and
administrative cases before the Office of the Ombudsman.

The ERC also vowed to resolve the PSA contracts filed by Meralco within
three months and will ensure that the cross-ownership limitations ruled by
the EPIRA shall not be breached.

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Link to Original Article:
http://powerphilippines.com/2017/07/17/csp-safety-net-promote-consumer-inter
est-erc/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com