Viray urges 3rd party overseer for CSP implementation

MANILA, Philippines - There should be third party to oversee the implementation of the controversial Competitive Selection Process (CSP) directive of the Department of Energy (DOE) to make it work, an industry official said.

Whether the CSP is good or bad for the energy industry is hinged on the implementing rules and regulations (IRR), former DOE Secretary and current Trans-Asia Oil and Energy Development Corp. president Francisco Viray said in a recent interview.

But he suggested the DOE and ERC should hire a third party to monitor the CSP activities of distribution utilities (DUs).

A third party “adds another layer” to the CSP process, Viray said.

Issued by Energy Secretary Carlos Jericho Petilla before leaving his post last month, the circular directs all DUs to go through competitive bidding in closing power supply agreements (PSAs).

It covers all DUs, including “electric cooperatives, private investor-owned distribution utilities, local government unit-owned and operated distribution utility, multipurpose cooperatives, entities duly authorized to operate within economic zones and other entities engaged in the distribution of electricity,” Petilla said in the circular.

Guidelines for the aggregation of demand will be jointly issued by the ERC and the DOE, as well as the process for the recognition or accreditation of the third party that will conduct the CSP.

Currently, a technical working group under the ERC is working on the IRR of the CSP directive, ERC commissioner Gloria Victoria Yap-Taruc said.

When asked if the IRR will be released by October, she said the matter “has not been brought to the chair yet and it’s something we have to discuss.”

For her part, ERC commissioner Josefina Patricia Asirit said the power regulator is not in a hurry to meet the 120 days target to come out with the IRR given the matter is of national interest.

“We have to act in the prudent side because this is going to affect the industry for reaching the implications,” she said. “The target is to meet that (120 days) but if it will compromise in the certain aspects of the industry then we should re-study it.”

The ERC has yet to come out with a draft to present to the public for consultations.