Distribution Utilities Told: Forge Bilateral Power Supply Contracts
To guarantee that they would not fall short of their future electricity supply, the Energy Regulatory Commission (ERC) has directed the distribution utilities (DUs) to already start finalizing bilateral power supply contracts.
On the strength of Resolution No. 21, the regulatory body resolved that there is a dire need for DUs to enter into future bilateral power supply contracts with power producers even at this early stage to make certain that the customers they serve and the country would not be stricken by another round of power outages.
Even with the much-anticipated commercial operation of the Wholesale Electricity Spot Market (WESM) next year, the ERC opined that it remains paramount that bilateral contracts are in place because they remain as the best shield from capacity shortages.
In fact, by all intents and purposes, WESM is mainly being positioned to cater to imbalances in the market, or those that would account for the non-contracted capacity.
The mandate of the Electric Power Industry Reform Act (EPIRA) is clear that the distribution utilities are required to enter into transition supply contracts (TSCs) with the National Power Corporation, to ensure continued electric service to their customers pending the ongoing implementation of policy reforms for the entire power industry, including the privatization of the generation assets of the National Power Corporation.
It was prescribed that the TSCs shall be in force one year after the implementation of open access and retail competition.
Given the delays in the privati-zation process, of which 70-percent asset divestment is a crucial precondition to open access, it was noted that it may take an even longer time before any genuine competition could reign in the market place. (MMV)
The sense of such scenario, according to the industry regulator, gives higher level of burden for the DUs to initially …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Distribution Utilities Told: Forge Bilateral Power Supply Contracts. Contributors: Not available. Newspaper title: Manila Bulletin. Publication date: December 11, 2005. Page number: Not available. © 2009 Manila Bulletin Publishing Corp. COPYRIGHT 2005 Gale Group.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.