MANILA, 3 April 2019 – An international policy group commended the Energy Regulatory Commission (ERC) today for promoting fair competition in pursuit of cheaper, more reliable power in the draft rules it recently issued covering power supply agreements (PSAs).
“The ERC is right to protect the public from fluctuating fuel prices in its latest draft rules for power procurement. Ordinary consumers and the whole economy would enjoy cheaper and reliable power if the Commission follows through in promoting genuine competition in the energy sector,” said Red Constantino, executive director of the Institute for Climate and Sustainable Cities (ICSC).
Captive consumers – or electricity consumers who cannot yet contract their own power suppliers – are exposed to price risks due to automatic fuel adjustment clauses in current PSAs. Constantino said the ERC has taken “a big step in the right direction. The draft PSA rules seek to pass on fuel adjustment risks from consumers to generators by requiring the latter to commit to fixed bid prices.”
According to Constantino, “Other measures in the draft rules promote transparency, efficiency, and accountability in power procurement. For example, streamlining procedures and requiring long-term plans would minimize the occurrence of power shortages caused by delays in the approval of PSAs.”
In the comments it submitted to ERC, ICSC urged the commission to conduct another hearing so all stakeholders in the power sector could further explain their comments and suggestions.
The Institute for Climate and Sustainable Cities (ICSC) is a Manila-based international climate and energy policy group advancing climate resilient, low carbon development.
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