The Department of Energy (DOE) is laying down the conditions on when competitive selection process (CSP) or bidding will no longer be required in the procurement of capacities by private distribution utilities (DUs) and electric cooperatives (ECs). In a draft Circular presented to industry stakeholders for comments, the energy department specified at least six conditions on when CSP will not be necessary when their supply sourcing as DUs and ECs forge power supply agreements. The DOE primarily stated “the provision for power supply by the National Power Corporation (NPC) in off-grid areas: prior to and until the entry of new power providers (NPP); or in emergency circumstances," will no longer need to go through CSP process. Another exemption will be “the provision for power supply by the Power Sector Assets and Liabilities Management Corporation through bilateral contracts for the power produced from the undisposed generating assets and independent power producer contracts.” For DUs exercising “opt-in mechanism” under the Green Energy Auction Program (GEAP), the DOE qualified that such process shall also be spared from the bid requirement on capacity procurement. The opt-in mechanism entails that the DU will be given the option to secure mandated RE capacity that it will need in its supply portfolio so it can comply with the volumes it will need under the Renewable Portfolio Standards (RPS) policy of the Renewable Energy (RE) Act. The GEAP is an auction system for RE capacities being offered to interested investors; and the bid round is being administered by the DOE. Further, the DOE stipulated that CSP is not also needed when a DU will be sourcing supply from embedded plants within its franchise area – specifically those that are utilizing indigenous or renewable energy resources. For that particular CSP exemption, it was emphasized that “the contracted capacity of the embedded generation plant/s shall not exceed 10 MW (megawatt) per Luzon DU and 5 MW per Visayas and Mindanao DU, or 3.0-percent of the DU’s peak demand, whichever is higher.” Nevertheless, if the DU will be selling any of the capacity of that embedded generation facility outside its franchise area, then that would already be covered by a CSP undertaking. The DOE further noted that negotiated procurement via emergency power supply agreement (EPSA) can also be freed from the CSP exercise, provided this “shall be filed directly with the ERC (Energy Regulatory Commission) within 30 calendar days after the occurrence of the force majeure or fortuitous events.” It was similarly specified that “the EPSA shall have a maximum period of one (1) year without further extension.” Another coverage of the CSP exemption will be the off-grid areas that have less than 1.0MW demand with 24-hour electricity service” – so long as this is not covered in the exemption set for NPC in its off-grid domain of operations.