DC2015-06-0008 (First Mandatory CSP Circular)

Department Circular No. DC 2015-06-0008 Mandating All Distribution Utilities to Undergo Competitive Selection Process (CSP) in Securing Power Supply Agreements (PSA) Issued: June 11, 2015 | Secretary Jericho L. Petilla

Overview

DC2015-06-0008 is the founding mandatory CSP circular — the first DOE issuance requiring all distribution utilities (DUs) to procure power supply exclusively through a competitive selection process. It established the three core CSP mandates that persist across all successor frameworks: aggregation of un-contracted demand, annual CSP cycle, and uniform PSA template. The detailed procedural framework was left to a 120-day joint ERC-DOE guideline [DC2015-06-0008, §3, 2015-06-11].

Scope of Coverage

All entities operating one or more distribution systems in main grid and off-grid areas [DC2015-06-0008, §2, 2015-06-11]:

• Electric Cooperatives (ECs)
• Private Investor-Owned Distribution Utilities (PIOUs)
• Local Government Unit-Owned-and-Operated Distribution Systems (LGUOUs)
• Multi-purpose cooperatives authorized to operate electric power systems
• Economic zone entities
• Other duly authorized distribution entities

Governing Principles (Section 1)

Four principles [DC2015-06-0008, §1, 2015-06-11]:

1. Transparency — reduce risk through open procurement
2. Competition — promote and instill competition in supply procurement
3. Least cost — ascertain least-cost outcomes unlikely to be challenged
4. Public interest protection

Three Mandatory CSP Features (Section 3)

All CSPs under this circular must observe [DC2015-06-0008, §3, 2015-06-11]:

1. Aggregation of un-contracted demand requirements — refers to wholesale DU demand and energy requirements, not Contestable Market demand under RCOA
2. Annual conduct — CSP to be held each year
3. Uniform PSA template — terms and conditions template to be issued by ERC in coordination with DOE

Third-Party Requirement

CSP must be conducted through a Third Party duly recognized by the ERC and DOE [DC2015-06-0008, §3, 2015-06-11]. For ECs, the Third Party must also be recognized by the NEA. No structural requirements for the Third Party were specified — those came with DC2018-02-0003’s TPBAC framework.

120-Day Joint Guideline Mandate

Within 120 days of effectivity, ERC and DOE must jointly issue guidelines and procedures for [DC2015-06-0008, §3, 2015-06-11]:

• Aggregation of un-contracted DU demand requirements
• Recognition/accreditation of the Third Party conducting the CSP

This delegation approach (thin circular + joint 120-day implementing guidelines) was reused in later DCs (e.g., DC2022-05-0017, DC2025-04-0005).

Non-Retroactivity

Prospective application only. PSAs with tariff rates already approved or filed for ERC approval before this circular’s effectivity are exempt [DC2015-06-0008, §5, 2015-06-11].

Monitoring and Enforcement

DOE-EPIMB and ERC jointly monitor CSP compliance and PSA implementation. ERC imposes existing fines and penalties for non-compliance [DC2015-06-0008, §§6–7, 2015-06-11].

Supersession History

Full text: Cleaned copy