AC Energy welcomes CSP implementation

MANILA, Philippines - AC Energy Holdings Inc., the power generation arm of the Ayala Group welcomed the implementation of the controversial Competitive Selection Process  or CSP for distribution utilities, a new process put in place by former Energy Secretary Carlos Jericho Petilla for securing power supply agreements.

“CSP is a critical point of EPIRA (Electric Power Industry Reform Act of 2001) ….to lower cost of power. Transparent and competitive bidding does work. It’s time for us to reinforce the system. If this works, it will make projects more financeable,” AC Energy president John Eric Francia said.

In contrast, other generators and distributors are quietly opposing the new Department of Energy circular.

Francia said CSP is already being implemented in Public Private Partnership projects of the government.

“We are in favor…. as long as it will be managed properly,”  Francia said.

However, he warned the CSP may slowdown the signing of power supply agreements.

“The downside of that, learning from PPP, is it will slow down…It forces you to get the best deal, “ he said.

Petilla put in place the CSP to make the power purchase process transparent and to bring down prices as what was the goal supposedly of the EPIRA.

Manila Electric Co., the country’s biggest power distributor, on the other hand prefers a voluntary implementation of the CSP.

“CSP is still up for discussion. In order to have more platforms for ensuring cost competitiveness, having a mix of bilateral, voluntary CSP and the WESM (Wholesale Electricity Spot Market) is the ideal mechanism…Rather than one size fits all…It’s the best mechanism rather than force the entire distribution utility,” Meralco president Oscar Reyes said.

The ERC and the DOE will issue the implementing guidelines of the circular. 

According the circular, the adoption of competitive selection as a policy will encourage investments in the power generation business, thereby ensuring availability of supply and promoting transparency in securing power supply agreements.