Power utilities servicing the Luzon grid still have 2,269 megawatts in available untapped or uncontracted capacities enough to supply power to distribution utilities (DUs) and electric cooperatives (ECs) and ensure customers have electricity even in instances of sudden surge in demand.
According to Energy Assistant Secretary Redentor E. Delola specified that for 2022, DUs in Luzon will have uncontracted requirements of 2,269MW while those in Visayas and Mindanao, their uncontracted demand requirements are projected at 967MW and 159MW, respectively.
Of the uncontracted capacities, the energy official disclosed that the only capacity slated for competitive selection process (CSP) this year by the DUs and ECs in Luzon had been placed at 893MW, hence, there will be a balance of 1,376MW requirements still not covered by power supply agreements (PSAs).
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For Visayas, the capacities scheduled for CSP had been pegged at 465MW; while for Mindanao, it has been set at 647MW.
“The DOE has already corresponded with distribution utilities regarding the rationale on the delay in conducting the CSP,” Delola noted.
In addition to that, he emphasized that the department has been requiring power utilities to report on “actions undertaken or to be undertaken on their scheduled CSPs, and plans and strategy on the remaining uncontracted requirements not scheduled for CSP.”
The CSP is an auction process administered by third party bids and awards committee (TPBAC) sanctioned by the off-taker (capacity purchaser) DUs and ECs so they can procure electricity supply to meet their demand – and that capacity shall be underpinned by a power supply agreement.
The DOE has been encouraging DUs to fully contract for their capacities, including for their peak demand requirement during summer months -- because that is the period when their requirements could go on sharp upturn.
After the award and signing of a PSA, both the contracting DU and the winning power supplier will have to do joint filing with the Energy Regulatory Commission (ERC) for the approval of their contract – especially the rates that shall be passed on to the consumers.
The CSP has been instituted as a government policy so the off-taker DUs can secure power supply on a ‘least cost basis’; and on the technical specifications that will ensure the reliability of the supplying plant.
One key prescription in CSP-anchored PSAs is the provision of replacement power to ensure that consumers will not be saddled with power service interruptions.