Philippine Energy Policy Wiki

Power Supply Agreement (PSA)

Status
operative
Confidence
medium

A Power Supply Agreement (PSA) is a bilateral contract between a generation company (GenCo) and a distribution utility (DU) or large electricity customer for the supply of a specified quantity of electricity at an agreed price over a defined term. PSAs are the primary contracting mechanism through which DUs secure their power supply requirements [PEP 2023-2050 Vol. II, 2023].

Role in the Philippine Electricity Market

PSAs sit alongside WESM spot market transactions as the two principal channels through which electricity reaches consumers:

  • PSA (bilateral contract): fixed volume and price for a contracted term; provides price stability and revenue certainty for GenCos seeking project financing
  • WESM spot market: real-time price discovery; covers residual demand above contracted volumes

Most DUs source the bulk of their power requirements through PSAs, using WESM to balance short-term over- or under-supply. See Wholesale Electricity Spot Market (WESM) .

Competitive Selection Process (CSP) Requirement

Under the DOE’s Competitive Selection Process (CSP) framework (DC2023-06-0021), DUs are required to procure PSAs through competitive bidding managed by an accredited Third-Party Auctioneer (TPA), rather than through bilateral negotiations. This policy aims to ensure least-cost power procurement for consumers. See Competitive Selection Process (CSP) .

PSA in the GEAP and FIT Context

  • GEAP winners (Green Energy Auction Program) execute PSAs with participating DUs at the auction-cleared price. See Green Energy Auction Program (GEAP) .
  • FIT-entitled plants previously executed PSAs with the system operator that guaranteed the FIT rate. The FIT-All suspension (ERC Resolutions 12/2022, 2/2023, 11/2023) affected payment to FIT PSA holders. See Feed-in-Tariff (FiT) System .

Corporate Power Purchase Agreements (CPPAs)

For Contestable Customers (large industrial/commercial consumers under RCOA), the equivalent contract is a Corporate Power Purchase Agreement (CPPA) — a bilateral agreement directly with a GenCo or Retail Electricity Supplier (RES). The CEFI Roadmap identifies CPPAs as a supplementary revenue stabilization tool for offshore wind projects. See Retail Competition and Open Access (RCOA) .

Stub page. PSA standard terms, ERC approval process, and sample contract structures not yet ingested. References drawn from PEP 2023-2050 treatment of CSP, GEAP, and electricity market mechanisms. Confidence: medium.