Energy Secretary Alfonso Cusi today backed a decision of the Supreme Court which requires competitive bidding for power supply contracts.
“We, at the Department of Energy (DoE), widely welcomed the decision of the SC, which held that “all Power Supply Agreement (PSA) applications submitted by Distribution Utilities (DU) to the Energy Regulatory Commission (ERC) on or after 30 June 2015 shall comply with the Competitive Selection Process (CSP) in accordance with the 2018 DOE Circular (DC2018-02-0003) and its Annex ‘A’.”
In a statement, Cusi said is the “right of our people to receive the full benefits of the country’s liberalized electric power industry as envisioned by the Electric Power Industry Reform Act (EPIRA).”
The Philippines needs a power sector marked by the deregulated and demonopolized generation and distribution of electricity, expected to yield the delivery of the best services at the least cost to consumers, said the DoE chief.
“In consonance with the DoE’s mandate, we have been consistently formulating policies, programs, rules, and regulations towards this end,” read Cusi’s statement.
“The SC ruling reaffirms our longstanding conviction on the fundamental role of the CSP as a mechanism to ensure transparency and fair competition in the procurement of our power supply” he added.
“It was designed to protect the consuming public from power rate spikes, pass-on charges, and avert predatory practices,” Cusi pointed out.
He said that in adherence to the SC’s judgment, we call for the exigent conduct of CSP for the PSAs of DUs, which include electric cooperatives and private corporations like Meralco.
“Power development in our country, particularly in Luzon has been at a standstill for three years. We can no longer afford any further delay. We need to act now with extreme urgency to make up for the lost time,” Cusi said.
“We will be calling for immediate consultative meetings with Meralco, their project partners, and those smaller contracts that have been affected by the SC ruling. Moreover, we are also asking all DUs in the country to submit annual supply demand projections for the next three years, and from 2023 to 2030 to ensure that they have sufficient supplemental power supply levels to meet their respective franchise obligations in the years to come,” the DoE head said.
As indicated in the DoE’s 2018 CSP Circular, the DOE will closely oversee the competitive bidding process to guarantee that the exercise is conducted in an open, transparent, effective, efficient, and equitable manner, he explained.
The rest of Cusi’s statement follows below:
“For its part, the Energy Regulatory Commission will work alongside the Energy Department by enforcing and implementing the relevant policies we have formulated, as well as all pertinent rules and regulations we have issued.
“However, should the process grossly fail, the DOE will not hesitate to enact all necessary measures to uphold the integrity and completion of the CSP.
“We seek the full cooperation of all our industry stakeholders as we work to improve the level and reliability of our country’s power supply. “