DOE seeks inputs on CSP policy revision

The Department of Energy (DOE) is undertaking a series of public consultation to solicit stakeholder-inputs and comments on the proposed revision of the competitive selection process (CSP) or the bidding system for power supply agreements (PSAs) of distribution utilities. The energy department carried out the first round of consultation last April 13; while the next ones will be this week on April 17 and 19. The deadline for submission of comments from relevant stakeholders will be April 21. According to Energy Undersecretary Rowena Cristina Guevara, the conduct of CSP by the DUs shall still be anchored on a ‘least cost’ paradigm; and the supply procurement shall be for their captive customers or the segment of end-users who cannot exercise yet their ‘power of choice’ in the retail electricity market. “The distribution utilities (DUs), as provided in the EPIRA (Electric Power Industry Reform Act) are mandated to provide power supply to its captive market at the least cost manner, with due consideration to quality, affordability, sustainability and reliability,” the energy official noted. Mandatory enforcement of CSPs on the supply sourcing of private distribution utilities and electric cooperatives for their captive customers was also affirmed by a Supreme Court ruling issued in 2019; following legal questions raised on the initial CSP rules set forth by the Energy Regulatory Commission. The DOE emphasized that the planned revisions in the CSP policy was crafted in close collaboration with the Energy Regulatory Commission (ERC) and the National Electrification Administration (NEA) “to ensure harmony and consistency of the implementation at different stages of the process.” The draft policy so far laid down the parameters on how the CSP shall be administered by the DUs and what are the exemptions that shall be covered by the rule. Following the issuance of the revised CSP policy by the DOE, it was specified that the crafting of the implementing guidelines shall be placed under the jurisdiction of the ERC, along with the warranted evaluation and approval processes of the PSAs resulting from the CSP. NEA, on the other hand, shall “advise all electric cooperatives on the conduct of CSP one year before the expiration of their PSAs.” The DOE similarly stipulated that the government-run electrification agency “shall provide assistance to ECs for the timely completion of CSP.” Relative to the auction mandate, the DOE stated that all DUs are directed to submit comprehensive Distribution Development Plan (DDP) and Power Supply Procurement Plan (PSPP) as these would serve as the key references of the DOE and NEA “in the issuance of the Certificate of Conformity in terms of the contract quantity and cooperation period.”