by Myrna Velasco April 10, 2016
General Santos City – The Energy
Regulatory Commission (ERC) is making it clear this early that power supply of
retail electricity suppliers (RES) are restricted in their power procurement
from their own power generation companies (GenCos).
“We are saying that they (RES) are
only allowed to get 50% of their capacity from their affiliates so that for
other RES without generators, they can also source with them because of their
limited supply,” ERC Commissioner Alfredo J. Non has told reporters in a
briefing.
The other provision in the next
Retail Competition and Open Access (RCOA) Rules to be issued by the ERC would
be the 30-percent market limit that each RES would be able to supply to.
That infers that no single RES can
go supplying beyond that portion of the market – which is reckoned based on
peak demand as estimated on a national basis. It was initially set at 25-percent
limit; but has eventually been raised by the industry regulator to 30 percent.
Non added that RES cannot also just
secure a license to fully supply their own or affiliated businesses – such as
those that have been catering to the electricity needs of their respective real
estate businesses or malls, among others.
“That is already an aggregation of
demand, and we have not reached that level to be supplied by aggregator yet, so
they have to be bound by the restrictions we imposed under the current RES Rules,”
he stressed.
ERC chairman Jose Vicente B. Salazar
for his part has emphasized that “we added two restrictions in ensuring that
there will be level playing field in terms of supply and of competition in the
supply market.”
It has been similarly prescribed in
the RES licensing rules that distribution utilities (DUs) can no longer
continue with their local RES function, instead they would need to carve out
that business segment to affiliates.
On the market share limit of
30-percent, Salazar noted that some DUs propounded a “free-for-all competition”
and without limits, but that was thumbed down by the ERC.
“Our assessment is: if we did that,
because of the dominant position of some players, the market will not grow. So
initially, we limit them to 30 percent so the remaining 70 percent can be
supplied by the other RES,” Salazar has explained.
He added “we’ve also put in the
rules, that between the 18th and 24th months from the time we issued this, we
will have a re-assessment and we will determine if we can change the
percentage, depending on what we see in terms of how these competitors are
doing business and how the market is growing in terms of the objectives of the
RCOA.” (MMV)
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