The Department of Energy (DOE) is urging all distribution utilities (DUs) to strictly follow the Competitive Selection Process (CSP) to protect consumers from sudden increases in electricity rates.
The call follows delays in the delivery of contracted power, which have placed pressure on the electricity market. The DOE said such delays can force utilities to purchase more expensive power from the spot market, driving up costs for consumers.
A key concern stems from a recent CSP conducted by the Manila Electric Company (Meralco), which involved sourcing 1,800 megawatts (MW) of supply. Of this, 1,200 MW was awarded to Excellent Energy Resources Inc. (EERI), a natural gas plant. However, EERI has yet to fully operate as planned due to the incomplete construction of the Linseed Liquefied Natural Gas (LNG) facilities, which will serve as the plant’s fuel source.
DOE Assistant Secretary Mario Marasigan warned that failure to deliver the contracted supply could result in significant price hikes for households. “Without EERI fulfilling its PSA with Meralco, a supply gap will emerge, forcing the utility to source more expensive power, ultimately increasing electricity bills for consumers,” he said.
The issue is further complicated by EERI and the Ilijan Natural Gas Facilities having to share the same LNG supply, adding to the supply risk.
To address these risks, the DOE emphasized the importance of properly constituted Third-Party Bids and Awards Committees (TPBACs) in all DUs. These committees are responsible for ensuring that power procurement through CSPs strictly adheres to the updated Power Supply Procurement Plan and that suppliers are selected based on both cost and capability to meet delivery schedules.
“DUs bear the responsibility of securing power at the lowest possible cost for consumers,” said DOE Undersecretary Felix William Fuentebella. “The CSP, along with its Terms of Reference, must ensure the selection of reliable generating facilities that meet contractual timelines.”
The DOE is currently in talks with Meralco and other DUs to avoid further complications. It stressed that regulatory delays and power plant construction issues should not be passed on to consumers in the form of higher electricity bills.
The department affirmed its commitment to work closely with stakeholders to uphold transparency, secure supply, and keep prices affordable for Filipino households.
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