Solon lauds SC ruling on PSAs
Credit to Author: JAVIER J. ISMAEL| Date: Tue, 07 May 2019 16:22:57 +0000
A senator on Tuesday welcomed the Supreme Court’s (SC) decision ordering the Energy Regulatory Commission (ERC) and companies to subject their power supply agreements (PSAs) to the mandated competitive selection process (CSP).
“The Supreme Court decision ordering the bidding of all power supply agreements submitted by distribution utilities (DUs) from June 30, 2015 is a win for all power consumers who are distrustful of sweetheart deals between DUs and generating companies,” said Sen. Sherwin Gatchalian, chairman of the Senate energy committee.
Gatchalian said the SC’s decision will mandate greater transparency in the contracting of power supply in the future, since the high tribunal mandates that power supply agreement should undergo CSP instead of directly negotiated deals, which could be burdensome to many Filipinos.
Data from the ERC show there are 93 PSAs filed from March 23, 2016 to April 29, 2016, with terms reportedly spanning more than 20 years, which were not bid out but were instead bilaterally contracted. Of the 93, seven PSAs of the Manila Electric Company (Meralco), with a total capacity of 3,550 megawatts out of the 4,600 MW, were deemed questionable.
The SC en banc, voting 10-2-1, ruled that all deals or PSAs submitted by distribution utilities or the power companies to the ERC on or after June 30, 2015, must undergo a CSP.
The ERC on Monday assured it would meet with the Department of Energy (DoE) and other stakeholders on the impact of the SC ruling.
“Meetings with the DoE and affected entities such as DUs, gencos (generation companies) and other power industry stakeholders will be carried out this week to jointly address the issues at hand.
We assure the public that the commission will be doing everything within its legal mandate to protect the consumers relative to the impact of the recent SC decision,” said ERC chairman Agnes Devanadera.
For his part, Energy Secretary Alfonso Cusi said the SC decision would help move the power projects forward. There are up to 90 PSAs reportedly pending with the ERC.
“It will help the projects get going. Definitely, it will be an addition to capacity,” Cusi said.
Meralco is yet to issue a statement on the high tribunal’s decision. Meralco signed power supply agreements with seven generators in April 2016 to secure 3,551 megawatts of capacity needed in its franchise area, which is the subject of the SC case.
The decision stemmed from a November 2016 petition by the Alyansa Para sa Bagong Pilipinas that questioned ERC resolutions which effectively allowed power companies like Meralco to escape the CSP and enter into self-negotiated deals instead.
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