Direct contracting for customers eyed

Published October 21, 2017, 10:01 PM By Myrna M. Velasco

https://business.mb.com.ph/2017/10/21/direct-contracting-for-customers-eyed/

Instead of going through the “aggregation strategy” set for distribution utilities (DUs), the proposal of the Senate Committee on Energy is to allow direct contracting for the customer under the green energy option program (GEOP).

That way, according to Senate Committee on Energy Chairman Sherwin T. Gatchalian, the customer will really be empowered in taking renewable energy as its power supply preference.

He said “it should not be the DU doing it for the customer, but the customer contracting it directly from RE plant or supplier, and then that customer will just have to pay for the wheeling and distribution charges.”

A wheeling charge is enforced by transmission service provider National Grid Corporation of the Philippines for the wheeling of capacity from plant to a load customer; then the DU will impose the corresponding charge for distribution in bringing that RE-sourced electricity to the end-customer. Both charges are fixed and approved by the Energy Regulatory Commission. “It should be direct contracting,” Gatchalian reiterated, because the customer can opt for a price that it can pay for on that particular RE capacity.

Under the GEOP Rules, it was propounded that customers under the ‘captive category’ (generally residential and other smaller customers) will still need to enlist with their DUs and just state their preference for a power supply coming from RE generation.

That DU will then aggregate all of these “enlisted RE capacities,” then bundle it as part of its power supply portfolio.

But since the final electricity supply eventually flowed into homes or establishments would still be blended, one cannot really be sure if he/she is even getting RE-generated supply or those from fossil fuel technologies.

For those that are already in the threshold of retail competition and open access (RCOA), they can freely contract with RE suppliers and will just pay the corresponding transmission and distribution charges.

The National Renewable Energy Board (NREB) will still need to endorse the GEOP Rules to the DOE for its final approval and then eventual implementation.