The Energy Regulatory Commission (ERC) has issued the procurement guidelines for regulated transmission and distribution assets and services of regulated entities.
The regulatory body said the guidelines are meant to ensure any significant capital expenditures (capex) and operating and maintenance expenditures (opex) of the transmission entity and distribution utilities that become part of the rate base adheres to accepted industry best practices to protect public interest.
ERC said that capex and opex amounts impact the wheeling charges of regulated entities which are paid by electricity consumers.
ERC added the guidelines also set the principles and minimum procurement processes of regulated entities in a manner that is efficient, fair and transparent as mandated under the Electric Power Industry Reform Act of 2001.
“The contracting and procurement of equipment, assets and services for regulated entities shall be subjected to audit by the ERC to ensure that the process meets principles of transparency, reasonableness and fair competition. By establishing these guidelines, the ERC is protecting electricity consumers and ensuring a level playing field for all stakeholders of the energy sector,” said Monalisa Dimalanta, ERC chairperson, in a statement.
Dimalanta added among responsibilities of regulated entities under the guidelines include the preparation of a procurement manual and annual asset procurement plan as well as the development of a unique procurement numbering system to track all procurement processes.
ERC said regulated entities must also implement a vendor rating policy to assess and monitor vendor performance as well as establish and operationalize e-procurement facilities to achieve economies of scale.
