ERC to ensure rates in utilities’ PSAs are least cost offers

ERC FB 061918 e1569239172178 - ERC to ensure rates in utilities’ PSAs are least cost offers

THE Energy Regulatory Commission (ERC) will ensure that distribution utilities that entered into a power supply agreement (PSA) with a generation company have opted for the least cost offer during the bid process, the agency said on Monday.

“At the moment, we cannot as yet determine or confirm whether the proposed rate in the Meralco PSA adverted to was indeed the least cost,” said ERC Chairman and Chief Executive Officer Agnes VST Devanadera in a statement.

She was reacting to news reports saying the ERC was being urged to confirm whether the competitive selection process (CSP) recently conducted by Manila Electric Co. (Meralco) indeed resulted and was awarded to the least cost bidder.

Ms. Devanadera said once the Meralco PSA application has been filed, the ERC will conduct a thorough evaluation to ensure that the proposed rate in the PSA is the least cost.

The CSP came after the Supreme Court affirmed its decision in July 2019 requiring all PSAs that have been submitted to the ERC from June 30, 2015 need to undergo the competitive bidding.

The process is a form of competitive public bidding for the purchase of electricity by the distribution utilities (DUs). The CSP requirement in the power sector is aimed at ensuring a fair, reasonable, and cost-effective generation charge for consumers, under a transparent power sale mechanism between the generation companies and the DUs. The CSP was promulgated for the protection of the consuming public, the ERC said.

Ms. Devanadera said her office will require the submission of pertinent documents from the distribution utilities. The filings will show proof that the CSP they had undertaken in securing their power supply from the generation companies adhered to the “least cost,” she added. — Victor V. Saulon

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