The Energy Regulatory Commission (ERC) needs to form a policy in centralizing the competitive selection process (CSP) which will create a level playing field for distribution utilities (DUs) and electric cooperative (ECs) in securing power supply deals with generation companies.

Philippine Electricity Market Corp. (PEMC) is currently finalizing its study on the third party auctioneer for the CSP, its president Melinda Ocampo said.

PEMC, the operator of the country’s electricity spot market, was assigned to become the third party auctioneer under Sen. Sherwin Gatchalian’s proposed bill, Senate Bill 1308 titled “An Act Institutionalizing Reforms in the Procurement by Distribution Utilities of Supply for the Captive Market.”

“We had our initial discussion with the senator. We’re in finalization stage,” Ocampo said.

Under a centralized CSP, requirements of DUs and ECs will be aggregated or lumped together which generation companies will make offers. But this would require policies or regulations from the ERC.

“It will be centralized than regional. It will create level playing field. There will be no sweetheart deals because it is automated. Generators will bid but they don’t know who the offtakers are. For example, Meralco can be combined with small DUs… but before we can implement that, we need policy and regulation,” Ocampo said.

Gatchalian proposed a third party auctioneer to ensure the conduct of the CSP to make sure the process is independent and transparent.

Currently, the CSP policy of the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) requires DUs to undertake competitive bidding to secure PSAs with generation companies.

Read more here.