Philippine Energy Policy Wiki

DC2018-02-0003

Status
superseded
Confidence
high
Effective date
2018-02-01

Full title: Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market

Issued: February 1, 2018 | By: Secretary Alfonso G. Cusi

Legal basis: RA 7638 §5(d); EPIRA §§2, 23, 37(i), 43; RA 9513 §2. The substantive policy is in Annex “A” (Sections 1–17), which is an integral part of this Circular. Effective immediately upon publication. Partially repealed DC2015-06-0008 (§§3–4 repealed; rest remains in effect). Superseded by DC2023-06-0021 (June 2023).

Key Provisions

Governing Principles (Annex A Section 1)

Five principles: (1) Transparency — open access to all GenCos; (2) Competitiveness — equal opportunity; (3) Least cost — DU meets Captive Market demand at lowest cost; (4) Simple and streamlined — tailored to each DU’s DDP parameters; (5) Accountability — in procurement and PSA implementation [DC2018-02-0003, Annex A §1, 2018-02-01].

Coverage (Annex A Section 2)

All DUs, grid and off-grid, must procure all PSAs through CSP. Four exemptions requiring DOE Certificate of Exemption (issued within 10 working days):

  1. Grant/donation-funded DU generation projects (DU equity ≤30%; taxes excluded)
  2. Emergency power (negotiated; cooperation ≤1 year; rate ≤ERC-approved equivalent; ERC evaluates within 60 working days)
  3. GOCC mandate for off-grid areas prior to NPP entry
  4. PSALM bilateral contracts for undisposed generating assets/IPP contracts per EPIRA [DC2018-02-0003, Annex A §2, 2018-02-01]

TPBAC (Annex A Section 5)

5 members: 3 from DU (technical, bidding-experienced, plus one lawyer/finance officer/technical person) + 2 captive customer representatives (not affiliated with DU). BOD = observer only. Chair/VC elected by members. Simple majority quorum; majority vote for decisions [DC2018-02-0003, Annex A §5.1, 2018-02-01].

Joint TPBAC for Aggregated DUs: Same 5-member structure established by MOA [DC2018-02-0003, Annex A §5.3, 2018-02-01].

TPBAC TWG (technical/legal/financial personnel) assists on PSPP, TOR, eligibility screening, bid evaluation, post-qualification. TPBAC Secretariat maintains all CSP records [DC2018-02-0003, Annex A §§5.2, 5.4, 2018-02-01].

TPA Alternative (Annex A Section 6)

DU may engage a TPA (team of private individuals or corporation with competitive bidding experience and power industry knowledge; not connected to any power industry player) instead of a TPBAC. ERC directed to issue TPA accreditation guidelines within 60 days of effectivity [DC2018-02-0003, Annex A §6.3, 2018-02-01]. This mandate was eventually implemented by DC2022-06-0027 (June 2022) and consolidated into DC2023-06-0021.

CSP Observers (Annex A Section 7)

Grid: DOE, ERC, NEA (for ECs). Off-grid: additional invitation to NPC. Invited at each CSP stage; absence does not nullify proceedings if duly invited [DC2018-02-0003, Annex A §§7.2, 7.7, 2018-02-01].

CSP Procedure (Annex A Section 8)

DU submits PSPP (in DDP) + Distribution Impact Study (DIS) + load flow analysis + due diligence report to DOE/NEA. TWG prepares Bid Documents (TOR + ITB). Publication: DOE E-based portal + NEA website + newspaper once weekly for 2 consecutive weeks. Pre-bid conference. Bid evaluation (legal/technical/financial). Receipt and opening. Post-qualification. Award. Joint PSA filing with ERC within 5 working days of signing. Total: ≤5 months from ITB publication to ERC filing [DC2018-02-0003, Annex A §§8.1–8.10, 2018-02-01].

Direct Negotiation After Failed CSP (Annex A Section 9)

Allowed after ≥2 failed CSPs with no outstanding disputes. Failed CSP: no bids received, only one GenCo submitted, or all offers are non-responsive [DC2018-02-0003, Annex A §9, 2018-02-01].

ERC Regulatory Mandates (Annex A Section 12)

Within 60 days: develop PSA template; develop CSP dispute rules and procedures; impose administrative sanctions for non-compliance. ERC may review compliance and issue appropriate regulations [DC2018-02-0003, Annex A §12, 2018-02-01].

Protest Mechanism (Annex A Section 13)

3-day request for reconsideration (verbal or written notice) → 7-day resolution by TPBAC. If denied: written protest to DU BOD within 7 days with protest fee (non-refundable; determined by TPBAC) → 7-day resolution. BOD decision is final. Court action only after finality of protest. Alternative: arbitration under RA 876/RA 9285 [DC2018-02-0003, Annex A §13, 2018-02-01].

Pages Created/Updated

  • Updated: Competitive Selection Process (CSP) (added DC2018-02-0003 to sources; expanded one-line entry into full “Original CSP Policy” historical baseline section: 5 governing principles, 4 exemptions with details, TPBAC 5-member structure, TPA alternative and ERC 60-day mandate, 8-stage CSP procedure, 5-month completion target, direct negotiation after 2 failed CSPs, ERC regulatory mandates, protest mechanism)
  • Updated: meta/sources-index.md
  • Updated: meta/ocr-queue.md

Full text: Cleaned copy