ERC explains decision to extend CSP validity

By Lenie Lectura – July 12, 2017

from Business Mirror

The Energy Regulatory Commission (ERC) on Thursday said its decision to extend the validity of the Competitive Selection Process (CSP) policy was meant not to favor any power stakeholder, but merely to address the valid concerns raised by the distribution utilities (DUs) and power-generation companies (gencos).

“The extension of the CSP implementation was not intended to benefit any electric power industry participant, but to give time to those who have already completed their power supply agreements [PSAs] but failed to submit the same to the ERC prior to the effectivity of the CSP,” ERC Officer in Charge Alfredo Non said.

Non and the rest of the ERC commissioners are facing criminal and administrative cases before the Office of the Ombudsman. The ERC commissioners are also being probed by the House Joint Committees on Good Government and Public Accountability.

During a committee hearing on July 4, the ERC clarified that its collective decision to extend the CSP was meant to address issues and concerns submitted by numerous industry participants pertinent to the implementation of the CSP scheme.

The ERC, soon after its promulgation of the CSP in November 2015 until April 2016, received letter-inquiries from DUs and gencos assailing the legal implications of the CSP to the PSAs that are currently existing, due for renewal, submitted to the ERC for approval, or otherwise already executed.

The commission said it was constrained to restate the effectivity of the CSP through a resolution in March 2017 to allow a transition period and avert any possible legal complexities between the parties as a result of the CSP implementation.

“The ERC developed and promulgated the CSP as an additional safety net to promote consumer interest, though it is not a mandatory requirement under the Epira [Electric Power Industry Reform Act].  It must be emphasized that the imposition of the CSP does not mean an abandonment of the thorough evaluation process of the ERC, nor is it tantamount to the approval of the PSA,” Non explained.

The ERC also vowed to resolve the PSA petitions of the Manila Electric Co. within three months, and will ensure that the cross-ownership limitations provided in the Epira will not
be breached.