Published November 5, 2017, 10:00 PM
By Myrna M. Velasco
The Energy Regulatory Commission
(ERC) is sorting out “regulatory fix” on multitude of power supply agreements
(PSAs) that could be “stranded” due to continuing lowering of the threshold for
retail competition and open access (RCOA) policy.
“These rules on stranded supply
contracts will be evaluated continuously as we move RCOA to 500kW (kilowatts)
and down to the household levels as other alternatives may be considered,” ERC
Officer-in-Charge Alfredo J. Non said.
Even at 750kW threshold, industry
players are already worried as to the fate of the stranded supply agreements as
there had been no definite policy direction and regulatory framework yet that
relevant government agencies providing for them.
And with the portended lowering of
threshold for aggregation to 500kW, they noted that such contractual
perplexities may just turn messier.
As the level of contestable
customers, or those given the privilege to contract directly with suppliers,
continues to go down, there are prevailing supply contracts between power
generators and off-takers (like distribution utilities) that are getting
stifled in the process.
Non explained that there had been
existing rules on stranded supply contracts included in the RCOA Rules, but
these tied up the hands of the industry players following the Supreme Court’s
issuance of temporary restraining order (TRO) against the enforcement of
mandatory retail competition in the sector.
The ERC Commissioner can just
guarantee for now that they will “recommend migration to 500kW only after a
study is made.” It has been the Department of Energy (DOE) setting the policy
direction on further threshold decline to 750kW and the aggregation-underpinned
500kW starting next year.
The department similarly noted that
it shall lodge to the Supreme Court its anticipated new Circular issuances to
support its plea on the TRO lifting.
With aggregation or clustering the
capacity contracting of end-users within a contiguous area, it was envisioned
that even some households could already be covered by the ‘power of choice’
dictum of RCOA.
At this point though, given the
legal hurdles thrown against the policy, contracting option is still at the
level of end-users in the 1.0 megawatt threshold and done on voluntary basis
for those shifting on power suppliers.
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