ERC to revise GENCO financial standards
The Energy Regulatory Commission (ERC) is revising the financial standards guidelines that generation companies (GenCos) must comply with.
In line with that policy modification, the regulatory body is soliciting comments and inputs from relevant stakeholders so these could be integrated in the final guidelines that shall be issued later on.
ERC Chairperson Agnes T. Devanadera thus called on all relevant parties “to submit their comments on the revised financial guidelines on or before July 31, 2020, so that any issues and inputs may be considered in the final version of the guidelines.”
The regulatory body indicated that fortifications in the guidelines are needed to guarantee the minimum financial capability of the GenCos, which in turn could ensure that they would be able to efficiently serve their customers.
The last time the financial standards for power companies had been set was in 2005, and given the roughly 15 years that already passed, the ERC opined that the policy revisions must “reflect the prevailing conditions and developments in the country’s electric power industry.”
Devanadera expounded “the Commission takes cognizance of the fact that we need to update our rules and guidelines to make them responsive and suitable to the prevailing conditions in the electric power industry.”
She explained that from the past decade, “a lot of developments have taken place in the power industry and the economic conditions,” hence, there’s already huge disparity if referenced on the standards laid down way back in 2005.
“With the revised guidelines, we wanted to ensure that GenCos are financially capable to operate and produce sustainable electricity,” Devanadera stressed.
In this year’s scourge of the coronavirus pandemic, the financial capacity of power companies had been tested, especially at the time when the government sought deferment of payments on power that they supplied to their off-takers (capacity buyers), although some distribution firms said they still paid their suppliers in full despite that mandate.
As prescribed, the guidelines shall apply to all GenCos, including but not limited to: entities which own and operate a generation facility; the entities owning generation facility that is operated by another entity under any management contract; those holding capital lease on generation assets; and the entities holding operating lease on generation assets.
The ERC proffered that the subject guidelines shall also integrate the required documents to be submitted “for new and renewal of certificate of compliance (COC) applications,” and such submissions must be done annually within the COC’s five-year duration.