ERC to fast-track PSA, capex approvals
By Myrna M. Velasco – December 15, 2022, 2:34 PM
from Manila Bulletin
With higher budget allocation, the Energy Regulatory Commission (ERC) indicated that it will pursue “digitalization” of its processes, so it can fast-track the approval of power supply agreements (PSAs) as well as the capital expenditure (capex) applications of power utilities.
“We’ll pursue digital transformation. We’re very fortunate that we were able to convince Congress to provide us the resources so that we can undertake this transformation of our processes – so what is not humanly possible can be done with the help of digital solutions, and that’s going to be our focus,” ERC Chairperson Monalisa C. Dimalanta told investors in this week’s Energy Investment Forum spearheaded by the Department of Energy.
Onward, she had given word that sponsor-firms of power projects will no longer wait for a long timeframe for the approval of their PSAs – that in the past, the supply contracts already lapsed even before the regulatory body can tackle such applications.
“I know some of you have experienced that you’ve applied for your power supply agreement; and the PSA has expired but you haven’t received any final decision from the Commission, so we would avoid that with digital solutions that we have,” the ERC chief stated.
The go-signal of the ERC on the enforcement of the PSAs is a very critical step in the whole chain of project development, because the action of the Commission will be the basis of the rates that they can pass on to the consumers.
Beyond greenlighting the power supply deals, the ERC similarly conveyed that its other focus shall be on timely approval of the capex applications as these are paramount in the expansion as well as reinforcement of the various facilities that can support demand growth in the country’s electricity system.
“Utilities can be assured that their capex applications will not be delayed because we don’t have the manpower to process all those detailed capex applications – because we want the capex applications to be detailed,” Dimalanta noted.
She specified that when evaluation of these petitions for capex of power utilities were being done manually, it could take years or even a decade before a final decision could be rendered, hence, that is the scenario that shall be fixed with the digitalization platform being advanced by the regulatory agency.
In fleshing out these applications for capital spending, Dimalanta said “we want to assure that we went through it, but it will take us 10 years. And by that time, the capex application – that capex for uprating of the line, for example, is no longer relevant.”
She thus emphasized that “we need digital solution that will enable us to do this for you in a very relevant manner. All of these things are tools…so that we can get closer to the goal that we have been chasing, which is affordability of electricity prices to our consumers — not only for consumers in the main grid, but also for consumers in off-grid areas.”
