DoE monitoring power deal renewals to ensure CSP rules are met
THE Department of Energy (DoE) said it will intervene and review existing power supply contracts with an automatic renewal clause to block any move to circumvent the rules on competitive selection process (CSP).
“The rate would still be negotiated. We will look at the rate. They can have an automatic renewal but DoE will still look at what they are automatically renewing,” Energy Secretary Alfonso G. Cusi told reporters in view of the recent issuance of the department’s CSP circular.
“They might be renewing at P5 per kilowatt-hour when the ongoing rate is already P3,” he said.
Mr. Cusi said the renewed power supply contract will also need clearance from the Energy Regulatory Commission (ERC), thus the rates would not be automatically carried over to the new agreement.
“That would also go through the ERC. For us, if there is an automatic renewal, we have an intervention for that,” he said.
Redentor E. Delola, DoE assistant secretary, said the department also monitors existing and expiring power supply agreements (PSAs), thus none can be renewed automatically.
Mr. Delola said that a year before a PSA expires, the DoE knows which ones are going to be renewed or extended.
“We can ask the ERC to review these contracts,” he said.
In a circular issued earlier this month, the DoE required power generation companies as well as new power providers to secure supply of electricity through a competitive bidding or CSP. The process is open to participation by any interested party and requires three process: advertisement or publication; pre-bid conference; pre-qualification; bid evaluation; post-qualification; and the award of the power supply contract.
Department Circular No. DC2018- 02- 0003 also calls for the distribution utilities, through their boards , to establish an independent third-party bids and awards committee to spearhead and manage the CSP.
The circular also set down the rules covering the membership of the five-member committee, two of whom are to come from the captive customers that are not directly or indirectly related or affiliated to the distribution utility.
Previously, the DoE and the Energy Regulatory Commission required the conduct of a CSP but did not give out a detailed guideline of what the process should entail. —