ERC suspends issuance of new electricity market caps

by Myrna Velasco March 29, 2016
http://www.mb.com.ph/erc-suspends-issuance-of-new-electricity-market-caps/

The Energy Regulatory Commission (ERC) has temporarily suspended the issuance of adjusted market share caps in capacities that power generators could own or control under the fiat of the restructured electricity sector.

“Pursuant to its mandate to promote competition and ensure consumer protection, the ERC resolves to hold in abeyance the issuance of the annual resolution setting the installed generating capacity per grid and for the national grid,” the regulatory body has stipulated under Resolution No. 03 Series of 2016.

The mandate for the ERC is to adjust the market share limits of generation companies (GenCos) – in megawatt capacities per grid and on a national scale — every 15th March of each year. But this time, the ERC indicated that it targets this to be resolved by June 30, 2016.



Under Section 45 of the Electric Power Industry Reform Act (EPIRA), power generators could only own or control up to 30-percent equivalent of installed capacities per grid; and 25-percent if measured on a national basis.

“The ERC sees the need to further study the existing guidelines to address issues on the appropriate determination of the market share of a person or entity covered by the market share limitations,” the Commission said.

ERC officials have previously noted that they are looking at parameters on how to properly credit capacities either in the ownership or ‘control of capacity dispatch’ held by a generation company in power plants.

The regulatory body has also been looking at the various industry developments, such as retail competition, that will be adding layer on power capacity control on the supply side.

For instance, with retail competition and open access (RCOA), generation companies are also allowed to become retail electricity suppliers – and that they can procure supply from their affiliate GenCos.

With that, industry stakeholders have been batting for clearer rules on how their capacities can be treated in the market caps calculation and how ‘double counting’ can be avoided.

The conventional approach adopted by the ERC in setting market share limits had been based on “the maximum capacity of the power plants submitted by the generation companies and other entities required to submit the generation company management reports.”