posted April 07, 2016 at 11:40 pm by Alena Mae S. Flores
GENERAL Santos City—The Energy
Regulatory Commission said Thursday it lifted the suspension on the issuance of
licenses for new retail electricity suppliers.
“We have lifted the suspension,” ERC
chairman Jose Vicente Salazar told reporters here.
The regulator issued a resolution in
October 2014, putting on hold the evaluation of retail electricity suppliers’
licenses to provide regulatory guidance for new players.
“The suspension has already been there
for almost two years, and there is now a clamor from the industry to issue
rules,” Salazar said.
Salazar said the commission could
now act on numerous pending applications for licenses, following the issuance
of a resolution.
Meanwhile, Salazar said compliance
to the 1-megawatt threshold under the retail competition and open access regime
was moved to Dec. 26, 2016, while compliance to the 750-kilowatt
threshold was moved to June 26, 2017.
Retail competition and open access
allow large power users to choose their own power suppliers with the aim of
bringing in competition to bring down power costs.
The Electric Power Industry Reform
Act of 2001 mandates that the threshold for open access can be lowered to 750
kW from 1 MW two years upon implementation. Open access was implemented in
December 2013.
“It seems that because of the delay
in finalization of rules...with rules of contestability, definitely 1,000
kilowatts [1 MW] will still be voluntary until Dec. 26, 2016,” Salazar said.
ERC expects around 671 customers in
Luzon and the Visayas with a demand of one megawatt and above to switch to the
retail electricity suppliers under the retail competition and open access
regime by June.
ERC released a resolution adopting
the 2016 rules governing the issuance of licenses to retail electricity
suppliers to promote free, fair and true competition in the power industry.
The resolution was issued after the
release of two draft rules last year which were subjected to public
consultations and group discussions.
“Whereas, after careful
consideration of the various views and comments submitted by interested
parties, the ERC deems it appropriate to adopt the 2016 rules governing the
issuances to retail electricity suppliers and prescribing the requirements and
conditions thereof,” it said.
ERC said in a 24-page ruling the
rules were aimed at ensuring consumer protection and enhancing the competitive
operation of the retail electricity market.
ERC said no person could engage in
the supply of electricity to end users in the contestable market (electricity
users who have a choice of electricity supplier), unless such person shall have
secured a retail electricity license from the ERC.
A retail electricity supplier could
be a generation company or an affiliate, an affiliate of a distribution
utility, retail aggregators, independent power producer administrator and any
person intending to engage in the selling, brokering or marketing electricity
to the contestable market.
ERC said it would issue a license to
a qualified retail electricity supplier that complied with all applicable
requirements such as technical and financial qualification, conditions of cross
ownership, market power abuse, anti- competitive behavior, among others.
ERC said retail electricity
suppliers engaged in other electricity related businesses should ensure that
that “there is no cross subsidization between and among its business
activities.”
ERC also imposed rules to avoid
potential abuse by retail electricity suppliers. ERC can revoke licenses if the
retail electricity supplier will provide false or misleading information,
failure to maintain credit standards, bankruptcy, not responding to agency’s
queries or customer complaints in timely fashion, among others.
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