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ERC Raises Concern on Having its Representative in CSP Proceedings

In a recent letter to the Department of Energy (DOE), the Energy Regulatory Commission (ERC) maintained that it is not prudent for its representative to be present as an observer during Competitive Selection Process (CSP) proceedings.

“Considering that the Power Supply Agreement (PSA) that will  be signed following the CSP proceedings will be eventually filed with the ERC, the presence of our representative might give the impression that the Commission has given its stamp of approval on the resulting PSA”, ERC Chairperson and CEO Agnes VST Devanadera clarified.   

The ERC is concerned that the presence of an ERC representative creates a perception that the entire CSP proceedings was done in compliance to all applicable rules and may no longer be assailed during the hearing for the application for the PSA approval.  Accordingly, the said perception puts ERC’s impartiality in the conduct of the hearings and eventual resolution of the case in question. 

The DOE Department Circular No. DC2018-02-003, entitled “Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market” required the Third Party Bids and Awards Committees (TPBAC) of Distribution Utilities to invite observers in their respective Competitive Selection Process (CSP), which includes the ERC.

The presence of an ERC representative as an observer has been a concern which was repeatedly raised during public hearings, particularly for the ERC Case No. 2018-002 RM (In re:  Adoption of the Proposed Rules Governing the Execution, Review, and Evaluation of Power Supply Agreements Entered Into by Distribution Utilities for the Supply of their Captive Market).

“The ERC, acting as quasi-judicial body in hearing applications for approval of PSAs, must comply with the basic tenets of due process.  As such, it must not only act impartial but must also appear impartial and accord every duly recognized interested party the opportunity to scrutinize the entire CSP process during hearings.  Thus, the presence of ERC representatives during CSP proceedings has serious implications.  Having said that, it is our position that we should not act as an observer during the DUs’ CSP proceedings”, ERC Chair Devanadera concluded.


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