‘Electric coops must conduct CSP’

BY LENIE LECTURA – JANUARY 24, 2022
from Business Mirror

Electric cooperatives (ECs) must conduct a competitive selection process (CSP) now if their power supply agreements (PSA) are set to expire in a few years, according to the National Electrification Administration (NEA).

In an advisory dated January 20, NEA Administrator Emmanuel Juaneza said “all ECs with PSAs expiring in about three to five years as of date, is highly suggested to commence the conduct of your respective CSPs to ensure continuous and sufficient power supply in your area.”

NEA’s reminder is in line with its 2019 memorandum on Department Circular No. DC 2018-02-0003 titled “Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market” and its corresponding implementing rules and regulations as approved by the NEA Board with Resolution No. 16 dated January 24, 2019.

Under the said memorandum, NEA reminded ECs that only the Department of Energy (DOE) could issue a certificate of exemption in the conduct of CSP.

ECs that are connected to the grid and have a high Wholesale Electricity Spot Market exposure shall not warrant an exemption, NEA said.

Also, power supply from joint venture projects of ECs are required to undergo the CSP.

The same memorandum states that the power supply procurement plan of ECs must be aligned with their distribution development plan.

They are likewise required to organize and secure the approval of the Third Party Bids and Awards Committee in order for the CSP to be carried out.

NEA’s 2019 memorandum is a reminder to all ECs seeking to be exempted from the CSP.

The CSP is a form of competitive public bidding for the purchase of electricity from power generation companies by an electric cooperative or a distribution utility. The process is aimed at lowering electricity cost.