ERC amends rules on new connections for power users

By Neil Jerome C. Morales (The Philippine Star) Updated April 04, 2012 12:00 AM


MANILA, Philippines - Power consumers will now have more leeway to choose their power distributor following changes in the Distribution Services and Open Access Rules (DSOAR), the Energy Regulatory Commission (ERC) said.ERC said it amended the DSOAR on new physical connections for both residential and non-residential consumers last February.


“Amendments to the DSOAR were promulgated by the ERC in furtherance of its mission to promote and protect the welfare and interests of electricity consumers,” ERC chairperson and CEO Zenaida G. Cruz-Ducut said.


For one, ERC clarified that cost of installation or extension of lines and facilities that are included in the distribution utilities (DUs) capital expenditures program must be shouldered by the DUs.


“This is regardless of the location of the electricity consumer requesting line facilities in the DU’s franchise area,” ERC said.


“Electricity consumers, both residential and non-residential, will have their requests for lines and facilities acted upon accordingly, without any cash outlay, regardless of their location within the franchise area since the DU will shoulder the costs for as long as the project is viable,” Ducut said.


Prior to the amendments, the right to extension of lines and facilities for residential customers is limited within 30 meters from the DU’s secondary voltage lines and the excess thereof shall be advanced by customer to cover the expenditures.


Under the open access that will be implemented late this year, customers can freely choose their electricity service provider. This means that electricity end-users with an average monthly peak demand of one megawatt can choose from whom to procure their electricity service.


Through open access, retail electricity suppliers can tailor their supply packages to provide customers with the best value based on their power consumption profile and other preferences.


Furthermore, ERC clarified that when other electricity end-users connect to lines and facilities paid for by non-residential customer as contribution in aid of construction (CIAC), these facilities will be part of the DU’s regulatory asset base. Hence, DUs must refund the CIAC to the concerned non-residential customer.


Meanwhile, residents and non-residents are exempted from advancing the costs of lines and facilities if the non-viable projects are under socialized housing projects.


ERC said the project is considered viable if the cost of installing facilities is at least equal to the revenues gained from the customers connected to such lines and facilities.


The amended rules also provided an option for non-residential consumers to advance the cost of the lines and facilities, subject to refund by the DU. The option is similar to the option given to residential consumers.


DSOAR was promulgated in 2006 to lay down the terms and conditions related to items like the provision of connection assets and services; service to the captive market; and supplier of last resort service given to the contestable market.


It also sets the procedures for establishing regulated service rates for DUs.


In November, ERC approved the deferment of open access due to the lack of necessary infrastructure and policies. It was supposed to kick off on Dec. 26, 2011.