Department Circular No. DC2015-06-0008
POLICY ON MANDATORY
COMPETITIVE SELECTION PROCESS FOR
DISTRIBUTION UTILITIES IN SECURING
POWER SUPPLY AGREEMENTS
Director Mylene C. Capongcol
Department of Energy
Intercontinental Hotel, Makati City
07 August 2015
Presentation Coverage
o Background
CIRCULAR NO. 2015-06o RecentDEPARTMENT
Policy Issuances
008
MANDATING ALL DISTRIBUTION
UTILITIES TO UNDERGO
COMPETITIVE SELECTION PROCESS
(CSP) IN SECURING
POWER SUPPLY AGREEMENTS
o Supply-Demand Highlights
o DOE Circular No. DC2015-06-0008
o Next Steps
7 August 2015
Policy Framework
3
Recent Policy Issuances
Ensuring Energy Security and Transparency in Rates and Processes
Department Circular No.
No.DC2015-06-0010,
“Providing Policies to
Facilitate the Full
Implementation of RCOA in
the Philippine Electric
Power Industry”
Department Circular No.
DC2015-06-0009,
“Providing for Additional
Guidelines for DUs in
Complying with their
Mandate to Ensure Supply
Security”
Enhancing
PSAs for
Captive
Customers
Protection
Department Circular No.
Dc2015-06-0008,
“Mandating All DUs to Undergo
Competitive Selection Process (CSP) In
Securing PSAs”
Mandatory
CSP for all
DUs
Supply-Demand Profile, 2015-2024
Luzon Distribution Utilities
Luzon DUs
Contracted Capacity (MW)
For PSA Approval (MW)
Uncontracted Demand (MW)
Peak Demand (MW)
WITH CCs
2015
2016
6,060
5,963
296
802
2,282
2,242
8,639
9,006
WITHOUT CCs
2015
2016
6,060
5,963
296
802
1,333
1,253
7,690
8,018
Source: 2015 DDP Submissions; PEMC’s RCOA Operational Highlights as of 21 July 2015
*For 2015, it refers to the current available capacity corresponding to the 2015 highest system peak demand in Luzon while 2016 onwards, pertains to
available capacity of 2015 plus committed capacity
Supply-Demand Profile, 2015-2024
Visayas Distribution Utilities
Visayas DUs
Contracted Capacity (MW)
For PSA Approval (MW)
Uncontracted Demand (MW)
Peak Demand (MW)
WITH CCs
2015
2016
1,108
1,039
273
284
173
312
1,554
1,635
WITHOUT CCs
2015
2016
1,108
1,039
273
284
158
297
1,539
1,620
Source: 2015 DDP Submissions; PEMC’s RCOA Operational Highlights as of 21 July 2015
*For 2015, it refers to the current available capacity corresponding to the 2015 highest system peak demand in Visayas while 2016
onwards, pertains to available capacity of 2015 plus committed capacity
Supply-Demand Profile, 2015-2024
Mindanao Distribution Utilities
Source: 2015 DDP Submissions
*For 2015, it refers to the current available capacity corresponding to the 2015 highest system peak demand in Mindanao while 2016
onwards, pertains to available capacity of 2015 plus committed capacity
Department Circular No. DC2015-06-0008
“Mandating All Distribution Utilities to
Undergo Competitive Selection Process
(CSP) in Securing Power Supply
Agreements”
Department Circular No. DC2015-06-0008
“Mandating All DUs to Undergo CSP in Securing PSAs”
• CSP is not new.
– First mandated in off-grid areas through DC2004-01-001,
issued on 24 Jan 2004, introducing Private Sector Participation
(PSP) in Existing NPC-SPUG Areas.
• Complemented by the Regulator.
– Issued ERC Resolution No. 11, Series of 2005, “Adopting the
Guidelines for the Setting and Approval of Electricity
Generation Rates and Subsidies for Missionary Electrification
Areas.”
7 August 2015
Department Circular No. DC2015-06-0008
“Mandating All DUs to Undergo CSP in Securing PSAs”
Highlights:
•
Signed on 11 June 2015 and published on 30 June 2015 at the
Philippine Daily Inquirer and The Philippine Star.
•
Will not apply to PSAs with tariff rates already approved
and/or have been applied for approval by the ERC before
the effectivity of the Circular.
•
There shall be enforcement and compliance monitoring by
the DOE, and with penalty provision through ERC.
7 August 2015
Department Circular No. DC2015-06-0008
“Mandating All DUs to Undergo CSP in Securing PSAs”
Salient Features:
• All DUs shall undergo CSP, through a Third Party duly
DEPARTMENT CIRCULAR NO. 2015-06recognized by008
the DOE and ERC.
–
ALL DISTRIBUTION
In the caseMANDATING
for ECs, shall
also be recognized by the NEA
• Conduct
–
–
–
UTILITIES TO UNDERGO
COMPETITIVE SELECTION PROCESS
(CSP)
IN SECURING
of CSP
shall
observe the following:
POWER SUPPLY AGREEMENTS
Aggregation of DUs’ un-contracted demand requirements;
Yearly undertaking; and
Conformance with the PSA Template containing key provisions to
be issued by the ERC in coordination with DOE.
7 August 2015
Department Circular No. DC2015-06-0008
“Mandating All DUs to Undergo CSP in Securing PSAs”
The Implementing Guidelines (IG):
CIRCULAR
2015-06-of aggregation of
• Shall containDEPARTMENT
specific details
on theNO.
process
008
un-contracted
demand requirements
of DUs and accreditation
MANDATING
ALL DISTRIBUTION
TO UNDERGO
of Third PartyUTILITIES
authorized
to conduct CSP.
COMPETITIVE SELECTION PROCESS
(CSP) IN SECURING
Supplemental
Guidelines and Procedures
POWER SUPPLY AGREEMENTS
• ERC to issue
design and execution of the CSP.
on the
7 August 2015
Implementing Guidelines Preparatory Activities
•
•
•
Creation of DOE and ERC Working Group on CSP to work on
the preparation of the Implementing Guidelines.
DEPARTMENT CIRCULAR NO. 2015-06008
Formulation
of Accreditation Rules for the Third Party.
MANDATING ALL DISTRIBUTION
TO UNDERGO
PreparationUTILITIES
of a Standard
PSA Template with key provisions
COMPETITIVE SELECTION PROCESS
e.g., commencement
date or COD, allowable outages, tariffs,
(CSP) IN SECURING
replacement
power,
responsibilities
of the Parties, among
POWER
SUPPLY
AGREEMENTS
others.
•
Setting of Parameters and Rules for Demand Aggregation.
7 August 2015
Department Circular No. DC2015-06-0008
“Mandating All DUs to Undergo CSP in Securing PSAs”
Next Steps:
• Develop TOR/Qualifications
forNO.
the
Third Party and
DEPARTMENT CIRCULAR
2015-06008of the Third Party.
engagement
•
MANDATING ALL DISTRIBUTION
UTILITIES TO UNDERGO
Data gathering
and continue
validation
COMPETITIVE
SELECTION
PROCESS
IN SECURINGof DUs.
contracted (CSP)
requirements
POWER SUPPLY AGREEMENTS
of un-
• Conduct of Public Consultations/Public Hearings.
• Issue IG within 120 days from the effectivity of the
Circular i.e., 27 October 2015
7 August 2015
End of Presentation
THANK YOU!
POLICY ON COMPETITIVE SELECTION PROCESS IN
SECURING POWER SUPPLY AGREEMENTS
Director Mylene C. Capongcol
Department of Energy
Intercontinental Hotel, Makati City
07 August 2015