DOE to clarify mandates, rules on supply procurement

DOE-diesel plant

The Department of Energy (DOE) is set to issue clarificatory guidelines surrounding its mandate and the Energy Regulatory Commission’s (ERC) role during the conduct of competitive selection processes (CSP) for power supply agreements (PSA). 

In a press briefing last week, Energy Secretary Raphael Lotilla said that they are looking at the mandates covered by the ERC, and the policies covered under DOE’s mandate.

Lotilla said that the DOE will be issuing “clarifications on this particular point in order to guide the public and private sector.” 

The statement came after San Miguel Corporation unit SMC Global Power Holdings Corporation (SMCGP) asked for a rate hike in its PSAs with the Manila Electric Co. (MERALCO) amid rising costs of fuel to run the Ilijan gas-fired power plant and Sual power plant. SMCGP said it is considering terminating its PSAs if the ERC would ignore its petition. 

ERC noted that it would be reviewing the rate hike plea as it would have serious implications. 

Lotilla added that he is confident that the ERC “will come out with proposed solutions in due time.” 

“Definitely, there are lessons to be learned from the current situation that we have; as I have emphasized, I would not want to pre-empt the ERC and they are studying these issues intently,” Lotilla stressed. 

SMCGP has applied for a Php 0.80 per kilowatt hour (kWh) hike for the 670-MW contracted capacity of the Ilijan plant, going from Php 4.30/kwh to Php 5.10/kwh.  It also applied for an average Php4/kWh increase for the 300 MW contracted capacity of the Sual plant, going from Php4.30/kWh to as much as Php8.30/kWh.