ERC: Supreme Court ruling affects P50-billion power contracts

By Alena Mae S. Flores – August 09, 2019 at 08:35 pm
from manilastandard.net

The Energy Regulatory Commission on Friday said some P50 billion worth of power supply contracts will be affected by the Supreme Court ruling on the competitive selection process.

“We will also need guidance on how prior settlements based on the affected contracts will be evaluated considering the rates that were implemented. Our initial calculations disclosed that about P50 billion worth of generated power is involved in the PSAs that were filed within the period covering June 30, 2015 to April 29, 2016, which we (the ERC) subsequently approved, and were implemented by the concerned parties in the PSA,” said ERC chairperson Agnes Devanadera in a statement.

“Therefore, the P50 billion will be translated into rate adjustments in the consumers’ electricity bill on top of the rate adjustment resulting from sourcing power from the electricity spot market,” Devanadera said.

ERC officials said the SC ruling on the CSP invalidated some contracts that had been implemented and on payments made from consumers to the distribution utilities to the generation companies.

The contracts, which will now emerge from the CSP, may have prices different from the implemented contracts.

Meanwhile, the ERC also warned of possible brownouts in Mindanao due to the Supreme Court ruling ordering the conduct of CSP or public bidding on all power supply agreements submitted by distribution utilities on or after June 30, 2015.

ERC said it would seek clarification from the SC on how to implement its ruling, which denied ERC’s appeal.

The court ruling declared all PSAs filed on or before June 30, 2015 for ERC approval to comply with the 2018 DoE circular on the competitive selection process on procuring supply.

Devanadera said the ERC had not received a copy of the decision but “nevertheless, should that be the case, we will comply with the directive of the Supreme Court.”

“We only need to seek guidance through a motion for clarification on how to implement their decision, particularly on the rates and the continued supply of electricity to the affected public utilities,” said Devanadera.