SC upholds ruling that power supply deals need to undergo bidding

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The Supreme Court (SC) upheld with finality its decision voiding orders of Energy Regulatory Commission (ERC) allowing the implementation of Manila Electric Co.’s (Meralco) power supply agreements (PSA) with power generation companies without undergoing public bidding.

This as the high court turned down the motion for reconsideration of ERC for lack of new issues to necessitate the reversal of its previous ruling.

The SC now required all PSAs submitted by Meralco and other distribution utilities with ERC after June 30, 2015 to undergo a competitive selection process (CSP)

In its en banc ruling last May 3, the SC granted the petitions of consumer group Alyansa Para Sa Bagong Pilipinas Inc. (ABP) and militant Bayan Muna partylist group questioning the 2015 resolutions of ERC postponing the implementation of its own policy requiring CSP for PSAs.

According to SC, the ERC committed grave abuse of discretion in issuing Resolutions No. 13 and No. 1 that postponed the implementation of Circular No. DC2015-06-0008, which mandated all distribution utilities to undergo CSP in securing PSAs.

ERC Resolution No. 13 no longer required a CSP for PSAs already filed with the ERC on or before November 7, 2015 while Resolution No. 1 postponed the implementation of CSP requirement to April 30, 2016.

It ruled that that the authority of the ERC was limited only to the implementation of the CSP, and that the ERC had no power and authority to postpone the CSP’s application that became effective on June 30, 2015.

“The ERC’s delegated authority is limited to implementing or executing Competitive Selection Process (CSP) in accordance with the 2015 DOE Circular, not postponing CSP so as to freeze CSP for at least 20 years, effectively suspending CSP for one entire generation of Filipinos,” the decision read.

“The delegated authority to implement CSP does not include the authority to postpone or suspend CSP for 20 years, beyond the seven-year terms of office of the ERC Commissioners postponing or suspending the CSP, and beyond the seven-year terms of office of their next successors, as well as beyond the six-year terms of office of three Presidents of the Republic,” it stressed.

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