Power Supply Agreements Demand Competitive Selection Process Review
A prominent consumer group has called on the Department of Energy (DOE) to critically assess and update the existing circular that governs the procurement of power supply agreements by distribution utilities. The National Association of Electricity Consumers for Reforms (Nasecore) raised concerns that the Competitive Selection Process (CSP) is falling short of delivering transparency and fair competition, which are its primary goals.
In a letter addressed to DOE Secretary Sharon Garin, and also sent to top government officials including President Marcos and legislative leaders, Nasecore highlighted the persistent issues undermining the CSP’s effectiveness. Nasecore president Petronilo Pete Ilagan emphasized that the policy, despite its consumer-focused intent, has not succeeded in achieving least-cost power procurement.
Consumer Group Cites Power Supply Agreements Flaws
“Our ongoing monitoring shows the CSP has failed to foster meaningful competition in the power market. Instead, it has maintained the dominance of incumbent and affiliated generation companies,” the letter stated. Ilagan also revealed that no new independent or reliable power suppliers have emerged to challenge these dominant players, leading to continuous hikes in electricity prices.
The group criticized distribution utilities for exploiting exemptions, emergency procurements, and procedural loopholes to avoid genuine competition, despite the DOE’s CSP guidelines. The letter, dated June 3, pointed out this loophole as a major factor contributing to the policy’s failure.
Energy Regulatory Commission Decisions Highlight Policy Gaps
Ilagan compared two Energy Regulatory Commission (ERC) rulings: a power supply agreement rate of P4.0459 per kilowatt hour approved in December 2019, and a much higher rate of P5.7816 per kilowatt hour approved in November last year. This significant increase underscores the CSP’s inability to secure cost-effective power deals.
He added, “The repeated failure to introduce new suppliers or ensure fair pricing—especially in Meralco’s case—exposes serious flaws in both policy design and enforcement.” Nasecore warned that without immediate reforms, Filipino consumers will continue to suffer from anti-competitive practices and rising electricity costs.
Nasecore Proposes Overhaul and Transparency Measures
The letter recommends officially declaring the current CSP framework a policy failure, acknowledging its shortcomings in ensuring transparent, competitive, and affordable procurement. It urges a comprehensive overhaul of the CSP circular, starting with a DOE-led review involving multiple stakeholders.
Furthermore, the group advocates for full public disclosure of all CSP-related documents, including bid criteria, evaluation results, and awarded contracts, to foster accountability and restore consumer trust.
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