ERC: 13 million electricity users affected by SC ruling on CSP

By Lenie Lectura – August 1, 2019
from Business Mirror

MORE than 13 million electricity users will be affected by the Supreme Court decision that required all power-supply agreements (PSAs) forged after June 30, 2015, to undergo competitive selection process (CSP).

In its 74-page motion for reconsideration filed before the High Tribunal, the Energy Regulatory Commission (ERC) said 11,949,688 residential customers or 71,698,128 persons; 1,144,842 commercial customers; and 21,909 industrial customers stand to be affected by the SC ruling.

It stressed that the SC decision “has serious implications” if the PSAs filed during the period starting June 30, 2015, to April 29, 2016, are declared null and void.

In particular, the ERC cited 99 PSAs that were filed during the period that did not comply with the CSP requirements.

“Hence, there are 99 PSAs [excluding two PSAs that were later withdrawn—54 acted upon, 45 unacted upon] which stand to be affected by this Honorable Court’s decision for failing to comply with the CSP requirements,” said the ERC.

These 99 PSAs cover 54 generating plants that were contracted by 52 distribution utilities. Of the 54 plants, 45 are greenfield plants that were either constructed or are about to be constructed, thus, have brought in or will infuse the additional capacity needed by the country.

These 45 greenfield plants have a total installed capacity of 8,860.10 MW. “As our economy and population grow, this additional capacity is crucial to ensuring that we avoid the power outages and brownouts of the past,” said the ERC.

These 99 PSAs also covered a certain percentage of the DUs’ total energy requirements and, in some instances, completely filled the requirements for electricity of the DUs’ customers.  “If these PSAs are voided, the generation companies would be constrained to stop supplying electricity to the DUs [distribution utilities] that distribute to the abovementioned customers since the generation company and the DU have no ERC-approved PSA, whether provisional or otherwise, as basis to supply and collect the appropriate rate in exchange for said capacity,” said the ERC.

The ERC also asked the SC to remand the case to the Court of Appeals for reception of evidence to determine the PSAs’ compliance with CSP requirements.