ERC introduces a rate cap on emergency power transactions

The Energy Regulatory Commission (ERC) has capped electricity rates in Emergency Power Supply Agreements (EPSAs) negotiated by distribution companies (DUs) and generators.

EPSAs are spoofed due to force majeure or random events as identified in a 2021 Department of Energy (DOE) agency circular. All EPSAs are subject to ERC approval.

“EPSA should be implemented immediately and the rates charged should be limited to the lowest ERC-approved generation tariff for the same technology in comparable areas, as stated on the official ERC website. These rates will apply until the ERC approves EPSA,” the agency said in a notice.

The ERC reminded DU that EPSA must be submitted for approval immediately upon signing and becoming effective. EPSA rates and conditions approved by the ERC will apply retroactively for the duration of the EPSA.

In addition, the ERC has stated that the purchase of emergency power will not be eligible for any subsidy, including the Universal Missionary Electrification Fee (UC-ME) for Small Power Company Group (SPUG) areas.

Previously, the Department of Energy placed a moratorium on the issuance of a Certificate of Exemption (COE) from Competitive Selection (CSP) until a new CSP policy is issued.

The Department of Energy, ERC, and the National Electrification Administration are currently developing a new CSP policy that aims to streamline and streamline the conduct of CSPs, specifically issuing COE-CSPs and reviewing the terms of reference for unsolicited proposals, among other things. .

Alternatively, DU and the electricity supplier will jointly submit their EPSA to the ERC for approval.

Manila Electric Co. said the implementation of the EPSA will help insulate electricity consumers from the volatile and potentially higher generation costs in the wholesale spot electricity market, which historically have been recorded during the dry season when demand for electricity rises sharply.