DOE to lodge revised RCOA Circulars before

Published October 23, 2017, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2017/10/23/doe-to-lodge-revised-rcoa-circulars-before-sc/

Two new circulars of the Department of Energy (DOE) will be lodged before the Supreme Court to seek the lifting of the temporary restraining order (TRO) against the retail competition and open access (RCOA) policy in the restructured electricity sector.

The two revised rules will effectively remove the RCOA provisions questioned before the high court – primarily its mandatory enforcement; the cost premium; and the act of dislodging the local retail electricity suppliers (L-RES) of the distribution utilities.

“We will include it in our petition before the Supreme Court – that this is the new policy direction that this administration is taking,” Energy Undersecretary Felix William B. Fuentebella told reporters over the weekend.

He emphasized that “if the Court would appreciate it, these could already remove the challenged provisions of the RCOA.”

One of the new Circulars will effectively set out ‘voluntary switching’ of qualified contestable customers to RES suppliers from the incumbent utilities serving them. Contestable customers are those segments of end-users that can already exercise their “freedom of choice” in underwriting contracts with their preferred electricity suppliers.

In the new rules, the DoE has provided leeway for the RCOA threshold to be brought down to 750 kilowatts and then to aggregation level of 500kW starting next year.

Presently, retail competition in the electricity market is maintained at 1.0-megawatt level and done on a “voluntary basis” with contestable customers following the SC’s restraining order in February this year.

Another provision in the RCOA and Competitive Retail Electricity Market (CREM) Rules being rectified in one DoE Circular would be the participation of the L-RES of DUs in the power retail market. Essentially, this will cancel out the ‘three-year winding down period’ being imposed upon DUs’ L-RES in the questioned RCOA Rules.

Fuentebella indicated that the Circulars are targeted for signing and eventual enforcement before the end of this year.

Following that, he noted, that they will be working on the corresponding filings at the high court, and will ultimately seek the lifting of the prevailing TRO on the RCOA policy.

The RCOA is a market restructuring prescription under the Electric Power Industry Reform Act (EPIRA) intending to empower consumers to choose electricity service according to their preferences of quality as well as reliability, and more importantly, based on their budgets.