Newly-designated Energy Regulatory Commission (ERC) chief Francis Saturnino Juan has strongly debunked claims of the Power for People (P4P) that its proposed new rules in the bidding process of bilateral power procurement and transmission ancillary service contracts will enable abuse in the power industry.
The P4P claims that ERC is proposing amendments to existing regulation for power supply agreements between distribution utilities and generation companies as well as the selection of providers for ancillary services that help maintain the operation of the grid and energy transmission.
Under these rules, the agency will merely monitor procedural compliance, eliminating a stringent review of rates in power and ancillary service contracts, it added.
In a statement, Juan said: “We are entering a new era, characterized by two pivotal developments in the regulatory framework: the Department of Energy’s (DOE) Competitive Selection Process (CSP) Policy and the Supreme Court’s landmark decision in Alyansa ng Bagong Pilipinas vs. ERC.”
“These are not merely procedural changes; rather, they represent a significant transformation, a compelling call to re-embrace the competitive principles that are fundamental to the Electric Power Industry Reform Act (EPIRA),” the new ERC head said. “In this new era, the role of the ERC is not diminished; it is transformed. Its mandate is clearer and more critical than ever: to be the guardian of the competitive process and the guarantor of its integrity”.
He explained that the CSP is the engineered mechanism designed by the DOE to fulfill EPIRA’s pro-competitive mandate.
“It is a transparent, public, and competitive bidding where distribution utilities seek the least-cost power supply to serve their captive consumers, and designed to discover the true, fair market price through the forces of supply and demand, not through closed-door negotiations,” Juan said.
Therefore, he added, the ERC’s primary duty in its rate-setting function must be to uphold the outcomes of a genuinely competitive CSP. ||
