Department Circular No. DC2018-02-0003

Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market

WHEREAS, Section 5 (d) of Republic Act No. 7638 or the "Department of Energy Act of 1992" declares, among others, that the Department of Energy (DOE) has the powers and functions to supervise and control over all the government activities relative.

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Competitive Selection Process (CSP) Advisory

Date Published: August 19, 2019

In view of the recent Supreme Court decision in Alyansa Para sa Bagong Pilipinas, Inc. vs. Energy Regulatory Commission (ERC), et al. (G.R. No. 227670, 3 May 2019), the Department of Energy (DOE) hereby issues the following advisory:

  1. All distribution utilities (DUs) with Power Supply Agreement (PSA) application with te ERC and did not undertake the CSP process on or before 30 June 2015, shall revisit their Power Supply Procurement Plan (PSPP) and identify possible impact of the deicision.
  2. The affected DUs may exercise the provisions on Sections 2.2.2 and 2.2.4 of DC2018-02-0003, subject to the limitations stated therein, specifically for not more than one (1) year, duting which time the DU must conduct CSP for its long-term power supply, to wit:

    xxx

    "Section 2.2.2. Negotiated procurement of emergency power supply; Provided, that the cooperation period of the corresponding PSA shall not exceed one (1) year; Provided further, that the rate  shall not be higher than the latest ERC approved generation tariff for the same or similar technology in the area."

    xxx

    "Section 2.2.4. Provision of power supply by the Power Sector Assets and Liabilities Management (PSALM) Corporation through bilateral contracts for the power produced from the undisposed generating assets and Independent Power Producers(IPP) contracts duly sanctioned by the "Electric Power Industry Act of 2001" or EPIRA as deemed by the DUs, subject to a periodic review of the DOE."

  3. Affected DUs that will apply for CSP Exemption shall submit documents in support of hte said application, including but not limited to Board Resolution/s, a copy of the negotiated PSA and supply demand scenario showing impact of the SC Decision on its supply profile.

    In addition, the application for CSP Exemption must be accompanies by an updated PSPP of the concerned DU."

  4. Submissionof the updated PSPP and the request for exemption shall be made not later than 20 August 2019.

For further inquiries, you may send them to the following DOE Officials:

Assistant Secretary Redentor E. Delola
Telephone No.: (02) 541-5516
Email Address : delola.redentor@doe.gov.ph

Director Mario C. Marasigan, CESO III
Telephone No.: (02) 840-2120
Email Address : mcmarasigan.epimb@gmail.com

(signed) ALFONSO G. CUSI
Secretary

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Competitive Selection Process (CSP) Advisory

Date Published: December 27, 2018

To : All Distribution Utilities

To effectively implement Department Circular No. DC2018-02-0003 entitled, "ADOPTING AND PRESCRIBING THE POLICY FOR THE COMPETITIVE SELECTION PROCESS IN THE PROCUREMENT BY THE DISTRIBUTION UTILITIES OF POWER SUPPLY AGREEMENT FOR THE CAPTIVE MARKET", the Department of Energy hereby issues the following advisory:

Click to view/download CSP Advisory

 

Competitive Selection Process Advisory

Date Published: April 13, 2018

To effectively implement Department Circular No. DC2018-02-0003 entitled, "Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market", the Department of Energy (DOE) hereby issues the following:

1. The DOE emphasizes that the CSP policy aims to promote the needs of the consumers as presented in the Distribution Development Plan (DDPs) and Power Supply Procurement Plans (PSPPs) of the Distribution Utilities (DUs). The DU shall embrace the principle of technology neutrality and consider the reliability of energy services in a least cost manner. The DU shall also ensure that it can meet the demand for its Captive Market at any given time.

Hence, Section 1, Subsection 1.4 of the CSP Circular is further clarified, to wit:

1.1. Item (iii) means that the fuel resource to be indicated in the Terms of Reference (TOR) shall describe the capability of the power generation plant needed to meet the load or demand behavior, which can either be conventional or renewable energy. The specific types of fuels enumerated are provided as examples only of conventional and renewable sources of energy.

1.2. The parameter on emerging technology under Item (iv) is optional and may only be specified when necessary, based on the load or demand behavior of the customers.

While new technologies are being encouraged to participate in the CSP, the TOR or the procurement process shall not refer to a specific type of technology or power plant.

2. Pursuant to Section 5 of the CSP Circular, all DUs are hereby advised to establish their respective Third Party Bids and Awards Committee (TPBAC), TPBAC Technical Working Group (TWG) and TPBAC Secretariat.

Further, the selection process on the representatives of the captive customers to the TPBAC of each DU shall be submitted to the DOE for review and approval.

The same applies to the establishment of the Joint TPBAC, Joint TPBAC TWG and Joint TPBAC Secretariat.

3. In accordance to Section 4, all DUs are advised to prepare their respective PSPPs to be incorporated on the DDP. Attached as "Annex A" is the PSPP template for the guidance of the CSP participants.

4. In accordance with the "buyers' market principle" under the RA 9136, the CSP Circular does not allow unsolicited proposals from suppliers. All PSAs shall be procured through the CSP and shall be based-on planning and scheduling of power supply requirements, as specified in the PSPP.

5. In accordance with the transparency principle in the administration of the CSP, all stages enumerated under Section 8.5 (Publication and Posting) shall be posted in the DOE CSP Portal.

In the interim, all updates related to the CSP activities and invitation to DOE as CSP Observers must be submitted to the DOE through e-mail address doe.csp@gmail.com.

For your guidance and compliance.

 

Click to view/download PDF files:

CSP Advisory (Signed by UFWF)
Annex A - Power Supply Procurement Plan Template (PDF)

Annex B - Power Supply Procurement Plan Template (Excel)