SC says power supply agreements must undergo competitive bidding

MANILA, Philippines — Consumers are set to benefit from more transparent power supply agreements (PSAs) after the Supreme Court ruled that contracts between electricity distributors and generation firms must undergo competitive bidding, Sen. Sherwin Gatchalian said on Tuesday.

A competitive bidding ensures that consumers are charged lower electricity costs.

The high court said all PSA applications submitted to the Energy Regulatory Commission on or after June 30, 2015 must comply with the competitive selection process requirement.

Gatchalian, who chairs the Senate’s energy committee, said the court’s ruling would bring about greater transparency in the agreements.

Cheaper, cleaner alternatives

The Supreme Court’s decision “mandates that power supply agreement should undergo (a) competitive selection process instead of directly negotiated deals, which could be burdensome to many Filipinos,” Gatchalian said in a statement.

Environmental groups welcomed the high court’s decision, saying that the ruling will not only result in lower power rates, but also present cheaper and cleaner alternatives.

The ruling was a win for coal-affected communities, which bear the brunt of environmental and health costs of coal-fired power plants, said the environmental group Greenpeace Philippines.

The Philippine Movement for Climate Justice said the ruling will provide relief for coal-affected communities in the provinces of La Union, Zambales, Bataan, Batangas, Quezon and Iloilo, which are reportedly threatened by power plants planned in seven PSAs.

In a statement, Msgr. Noel Villareal of Our Lady of Angels Parish Church in Atimonan, Quezon province — a small parish leading the fight against coal — said the push for another coal-fired plant in their province “will not only cost money from consumers … but will cost the environment, health and safety of our communities.”

RA 11285

President Rodrigo Duterte has signed a law seeking to institutionalize energy efficiency and conservation as a way of life by granting incentives to projects promoting such goals, and “by formulating, developing and implementing energy efficiency and conservation plans and programs.”

The President signed Republic Act No. 11285, or the “Energy Efficiency and Conservation Act,” on April 12.

The Department of Energy, the lead agency in implementing the new law, is expected to ensure compliance with prescribed ratings standards for energy performance in buildings and industries in coordination with other government agencies and local government units. It will also prescribe energy labels for all energy-consuming products and devices.