The Energy Regulatory Commission (ERC) is reviewing an emergency power supply agreement (EPSA) between La Union Electric Cooperative Inc. (LUELCO) and GNPower Kauswagan Ltd. Co. (GNPK) to ensure regulatory compliance and avoid any impact on electricity rates.

Virtual hearings are scheduled for 24 April and 30 April to assess the contract’s compliance and rate impact.

The ERC said it has instructed LUELCO to publish notices and submit documents, including rate impact analyses and affidavits of service to local government units, the Solicitor General’s office, and congressional energy committees.

Under the EPSA, GNPK will supply power at P6.0069 per kilowatt-hour (/kWh), with adjustments based on fuel prices and foreign exchange.

The contract aims to stabilize LUELCO’s generation rates and mitigate the impact of spot market price spikes, which reached P23.86/kWh before the EPSA was implemented.

Stakeholders consulted

LUELCO said it consulted energy stakeholders and solicited bids from suppliers before choosing GNPK, which offered the best terms. The board approved the contract, and deliveries began on 18 November 2024.

GNPK is a joint venture of ACEN Corp., Ayala Corp.’s power unit, the Philippine Investment Alliance for Infrastructure fund, and Power Partners Ltd. Co.

LUELCO signed the one-year contract on 16 November 2024, after its previous agreement with GNPower Dinginin Ltd. Co. (GNPD) was halted by a Supreme Court ruling on competitive selection processes (CSP) for power supply agreements submitted after 30 June 2015.

The ERC later ordered LUELCO to cease its contract with GNPD, compelling the cooperative to seek emergency power to protect consumers from volatile spot market prices.

LUELCO had entered an emergency contract from October 2023 to October 2024 while preparing for a long-term CSP with Pangasinan I Electric Cooperative Inc.

However, delays in approving bidding documents by the National Electrification Administration extended the process beyond the expiration of the first emergency contract.

Citing force majeure, LUELCO invoked ERC Resolution No. 16, Series of 2023, to enter a new EPSA without a CSP.