Energy Regulatory Commission to issue selection process for all power players

MANILA, Philippines — The Energy Regulatory Commission (ERC) will issue streamlined rules on competitive selection process (CSP), including a format for power supply agreements (PSA) for all power players to follow to secure supply in the grid and to protect consumers from sudden spikes in power rates.

The move is in line with the recent yellow and red alert warnings raised in the Luzon grid that led to rotational brownouts in the past month.

The commission has finished the streamlined CSP rules and will hold en banc meetings to approve the new rules, ERC commissioner Catherine Maceda said.

“We’re looking at July (to issue the new CSP rules). We would probably need one or two en banc meetings to approve that,” she said.

The ERC and the Department of Energy (DOE) have been working to harmonize their respective CSP rules.

Alongside the issuance of the CSP rules is the release of the PSA format for all power players.

Maceda said the new PSA format would include a provision on the procurement of replacement power, especially in times when the generating power plant undergoes forced maintenance shutdown.

“Hopefully, (we will come out with the PSA format) in 30 days,” she said. “We already have a draft and it is already in the penultimate stage.”

However, the new PSA format will only cover prospective contracts between power distributors and generating companies (gencos).

For the previous PSAs with provisional authority (PA), Maceda said the ERC will act on the applications and issue a final decision accordingly.

“The pending PSAs are contracts between parties already agreed upon. We issued PA…but we still have a final decision on the applications,” the ERC commissioner said.

The DOE is also conducting a review on replacement power and outage allowance under existing PSAs, as ordered by Energy Secretary Alfonso Cusi.

This is to ensure that power distributors and gencos are implementing the provisions and the higher cost of power will not be passed on to consumers in times of forced outage of plants that lead to tight supply conditions in the grid.

In March, the Luzon grid was placed on yellow alert for three days and this has already pushed up consumers’ electricity bills by 6.33 centavos per kilowatt-hour (kwh) in the Meralco franchise area.

Last month, yellow and red alerts were raised in the Luzon grid almost daily, with several days of rotational brownouts occurring across the island region, particularly in Metro Manila.

The tight supply conditions were due to unforced shutdown of several power plants.