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Publish Date : 06-Nov-2015

The Energy Regulatory Commission (ERC) has agreed to implement the competitive selection process (CSP) in power supply procurement by distribution utilities (DUs) for their captive markets. ERC chairman Jose Vicente B. Salazar said the decision aims to make transparent the way in which DUs purchase power from power producers.

He said the CSP ensures that such supply is procured and passed on to customers at the least possible cost. Salazar said the CSP would see a DU executing a power supply agreement (PSA) with a production company only after successfully meeting the process' requirements.

A DU is required to openly call for and get at least two qualified bids from production firms. The DU is not barred from entering into an agreement for power supply. Under the CSP, direct negotiations with other power suppliers can be entered into only after at least two failed CSPs.

Once implementation of the CSP starts, the ERC will no longer allow the filing by DUs of applications for PSA approval without meeting the CSP requirements. Salazar added, "The resolution removes all uncertainties on how the CSP will be implemented by the ERC and paves the way for a regime of greater transparency and competition in the power supply procurement processes in the industry."

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