A measure seeking to enforce competitive, transparent and uniform guidelines on securing electricity is expected to result in annual savings of as much as P13 billion in electricity rates.
Senate Bill 1653, or the Electricity Procurement Act of 2018, aims to integrate the competitve selection process (CSP) in procuring power requirements by distribution utilities (DUs) and related entities.
“This increased competition would then drive [power-generation] costs down, resulting in average savings of P60 for the average household consuming 200 kilowatt hours per month—equivalent to approximately 2 kilograms of rice,” said Sen. Sherwin Gatchalian, the bill’s principal author.
Once this system is in place, generators will compete to lower rates to seal a deal with a DU, he added.
The Department of Energy shall oversee the entire CSP, while the Energy Regulatory Commission (ERC) shall exercise its regulatory powers.
The bill also requires consumer representation in every stage of the CSP. Also, DUs and related entities shall determine the volume of power demand they shall secure through the process.
“[The] ERC shall exercise its rate-setting power by establishing the reserve price for every CSP by taking into consideration, among others, a DU or other distribution entities’ demand profile and the available supply in the market,” it stated.
The power regulator will formulate the CSP rules in consultation with private and public stakeholders.
Meanwhile, an electronic portal containing all relevant information on the CSP will be made available to consumers.
A DU or related entity may sign an interim negotiated contract with a generation company or supply aggregator in the event of force majeure, provided the deal will take effect immediately, But subject to an ERC review, the price is not higher than the reserve price for similar demand, and will last for one year at most.
According to the measure, the CSP engenders transparency, improves the security of supply and ensures stability of electricity rates to customers who have no option of choosing their power supplier.
The CSP is in line with DUs and other entities’ obligation under Republic Act 9136, or the Electric Power Industry Reform Act of 2001 (Epira), to ensure power supply to its captive market in the least costly manner.
Lagareon, J. S. (January 29, 2018). Senate bill seen saving power consumers P13B. Manila Times. Retrieved from http://www.manilatimes.net/senate-bill-seen-saving-power-consumers-p13b/377029/