‘ERC scrutinizing power supply applications’

By Lenie Lectura – September 22, 2020
from Business Mirror

The Energy Regulatory Commission (ERC) said Tuesday that power supply applications are being thoroughly evaluated as some electric cooperatives (ECs) and power suppliers are engaged in a legal tussle.

The Bantayan Island Electric Cooperative (Banelco) and Isla Norte Energy Corporation (INEC) recently filed for approval of their joint application for an interim power supply agreement (IPSA) with the ERC.

The ERC also awaits the power supply agreement (PSA) to be filed by Banelco and INEC.

Banelco recently awarded a PSA to INEC, a subsidiary of Vivant Energy Corp. The PSA must be approved by the ERC first prior to its implementation.

“We need to check if their court case has an impact. The main PSA, I believe, is still undergoing pre-filing. It’s not yet filed with us. The IPSA, meanwhile, is under evaluation,” said ERC Commissioner Rexie Digal said.

Legal disputes among ECs and power firms are not new, she added. That’s why the agency takes its time to evaluate all applications particularly those filed by parties that are involved in legal proceedings, explained Digal.

Banelco has an existing PSA with Bantayan Island Power Corp. (BIPCor) which will expire in Novemer 2021.

BIPCor participated in the competitive bidding last year, but the new contract was awarded to INEC.

BIPCor alleged that there was an “apparent systematic and coordinated effort to ease Bipcor out as Banelco’s sole power provider at all costs.”

BIPCor has elevated its complaint to the Mandaue City Regional Trial Court (RTC) Branch 84 but its application for the issuance of a temporary restraining order (TRO) on Banelco’s award of a 15-year, 15-MW power supply contract to INEC was denied.

“Our company is now in the midst of a legal battle to continue our service to households and industries in Bantayan Island with adequate, reliable and sustainable electricity.

We maintain that there was gross violation of the rules governing the grant of PSA, the bidding protocols, and the CSP as mandated by the DOE. Our disqualification from the bidding due to a simple and minor defect in our document – which was not even listed in the Bidding Procedures—was absolutely without basis. Thus, it was highly anomalous and illegal for Banelco to arbitrarily proceed with the grant of the contract to INEC,” BIPCor DirectorFichte Peñaloza had said.

Banelco, in its application, said it initially asked BIPCor to continue providing additional capacity to augment the shortage in power supply but “BIPCor find it not viable to continue providing additional capacity” prompting Banelco to look for another provider of emergency power supply to address the said shortage.

The IPSA, which has been exempted by the Department of Energy from competitive bidding, is good for one year.