The Energy Regulatory Commission (ERC) will start enforcing guidelines on the capital expenditures (capex) as well as procurements of regulated power utilities, as these cost items are being factored into the calculation of the overall tariff being passed on to consumers. The regulatory body noted that the rules will cover the private distribution utilities (DUs) and electric cooperatives (ECs) as well as transmission firm National Grid Corporation of the Philippines. Before the rules were firmed up, the ERC indicated that relevant parties had been provided the “opportunity to submit their comments on the draft guidelines before its promulgation.” It qualified that aside from capex, strict adherence to the guidelines shall also be required on the operating and maintenance expenditures (opex) of the regulated power entities; but this will not include the power supply procurements of DU because that’s already covered under the competitive selection process (CSP) policy. “The guidelines aim to ensure that any significant capex and opex of the transmission entity and distribution utilities (DUs) that become part of the rate base adhere to accepted industry best practices to protect the public interest,” the ERC emphasized. As designed, the capex and opex of regulated players in the restructured power industry are part of the building blocks or items that are integrated in the calculations when they apply for tariff reset. ERC Chairperson Monalisa C. Dimalanta explained “the contracting and procurement of equipment, assets, and services for regulated entities shall be subjected to audit by the ERC to ensure that the process meets principles of transparency, reasonableness and fair competition.” By establishing the guidelines, Dimalanta said the ERC is "protecting electricity consumers and ensuring a level playing field for all stakeholders of the energy sector.” In line with this regulation, ERC said the responsibilities of the regulated players revolve around preparation of a procurement manual and annual asset procurement plan and development of a unique procurement numbering system to track all procurement processes. Other requirements include implementation of a vendor rating policy to assess and monitor vendor performance, and  the establishment and operationalization of e-procurement facilities to achieve economies of scale. “All these are envisioned to achieve operational efficiency which translates to operational cost savings,” the regulatory body stressed. Invoking transparency as well as fairness and efficiency in the procurement processes of the industry players, according to the ERC, had been fundamentally enshrined under the Electric Power Industry Reform Act (EPIRA), or the law which ushered in transformative changes in the Philippine power sector.