Emergency power procurement pricing allowed to vary from approved tariff

By Ashley Erika O. Jose – June 26, 2023 | 8:25 pm
from Business World

PHILIPPINE STAR/MICHAEL VARCAS

THE pricing of emergency power supply agreements (EPSAs) will be allowed to vary from tariff levels approved by power regulators, subject to certain conditions, the National Electrification Administration (NEA) said.

The NEA issued the statement following consultations with the Energy Regulatory Commission (ERC) and the Department of Energy.

“ECs (electric cooperatives) can also negotiate a higher or lower tariffs than the ERC-approved tariffs for each technology available in the area against the EPSA rate, provided that the ERC is satisfied the rate will benefit consumers,” the NEA said, citing an advisory released earlier by the ERC. 

Earlier this month, the ERC issued show-cause orders against some DUs for entering EPSAs priced higher than the tariffs approved by the ERC. 

In its advisory, the ERC said that EPSAs must be immediately filed with the Commission upon signing of the agreement, and that ECs can only enter into EPSAs after a declaration of force majeure.

“The latest lowest approved generation tariff for the same technology in comparable areas as posted in the ERC website will be the applicable rate which can be passed through to consumers while the EPSA is still pending approval,” the NEA said.

ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that if no similar technology is available, the ECs must refer to surrounding regions with the same specific technology.

NEA Administrator Antonio Mariano C. Almeda said that the ERC must also look into the possible cases of over-contracting and must “intervene as the Regulator may possibly act within its authority for the possible reduction of power supply through amendment or cancellation of the subject agreement with the concerned power supplier.”