ERC Resolution No. 07, Series of 2026 – Amended Guidelines on Power Supply Agreement Procurement
ERC issued amended guidelines for the procurement, execution, and evaluation of power supply agreements by distribution utilities, strengthening competitive selection, transparency, and compliance with least-cost and renewable energy policies for captive market supply.
4/1/20263 min read
SUMMARY
WHAT IT IS
This Resolution adopts amended guidelines for how Distribution Utilities (DUs) procure, execute, and seek approval for Power Supply Agreements (PSAs) for their captive market, aligning with recent DOE policies and stakeholder consultations.
Distribution Utilities (DUs)
Electric Cooperatives (ECs)
Generation Companies
IPPAs
RE Developers
NGCP
WESM Participants
Captive Market Consumers
WHO IS AFFECTED
KEY DEADLINES
DUs must submit required reports within 5 calendar days from commencement of supply under a PSA.
PSAs/EPSAs must be filed with ERC within 30 calendar days from execution.
ERC to resolve EPSA applications within 180 days, and regular PSA applications within 270 days.
Transition provisions apply for ongoing CSPs and pending applications as of effectivity date.
TAKEAWAY
DUs must strictly follow new CSP and PSA approval procedures, update internal blacklisting rules, and ensure timely compliance with all documentary and reportorial requirements to avoid penalties and delays.
KEY POINTS
Scope: Applies to all Distribution Utilities (DUs), whether on-grid or off-grid, Generation Companies (Gencos), and Independent Power Producer Administrators (IPPAs) supplying power to DUs for their captive market, except as expressly excluded.
Mandatory Competitive Selection Process (CSP): All power supply for captive market must be procured via CSP, except for limited instances specified in DOE Circulars and subject to ERC compliance determination.
Right of First Refusal (ROFR): Host DUs have ROFR over capacity from Covered Renewable Energy (RE) Facilities needed for RPS compliance, to be exercised within three (3) months from receipt of offer.
Emergency Power Supply Agreements (EPSA): DUs may enter into negotiated EPSAs for a maximum non-extendible period of one (1) year, with interim rates capped at the latest ERC-approved generation tariff; notification to ERC/DOE/NEA/NPC required within five (5) calendar days of force majeure event.
BAC Requirements: DUs must establish a Bids and Awards Committee (BAC) with at least five (5) members, not related to DU-BOD or affiliated with any Genco within the fourth degree; BAC manages CSP and is accountable for decisions.
PSA Terms: Maximum term of ten (10) years for Financial PSAs, fifteen (15) years for Physical PSAs, and twenty (20) years for Physical PSAs with RE plants; tariff structure for Financial PSAs must be fixed for the contract duration.
Filing Deadlines: Joint application for PSA/EPSA approval must be initiated within thirty (30) calendar days from execution; minimum pre-filing requirements must be submitted within thirty (30) days from execution.
Compliance Obligations: DUs must supply electricity in the least cost manner, ensure regular reporting to ERC, and comply with the 50% limit rule under EPIRA Section 45(b).
Penalties: Violations subject to administrative fines ranging from PhP100,000 to PhP50,000,000, blacklisting, and possible criminal prosecution; penalties cannot be passed on to consumers.
Blacklisting: Winning Bidders failing to execute or comply with PSAs may be blacklisted for a minimum of three (3) years; DUs must adopt internal blacklisting procedures and notify ERC.
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ERC Resolution No. 07, Series of 2026
Detailed policy analysis
Operational and compliance implications
Stakeholder impact assessment
Risk flags and ambiguities
Suggested next actions
PREMIUM REGULATORY ANALYSIS
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Tags: Power Supply Agreements, Competitive Selection Process, Distribution Utilities, Blacklisting, Renewable Energy, Administrative Penalties