by Myrna Velasco May 18, 2016
(updated)
The Energy Regulatory Commission
(ERC) is cementing with finality the prohibition it intends to enforce versus
distribution utilities (DUs) on the retail competition phase of the deregulated
power sector.
In an interview with reporters, ERC
chairman Jose Vicente B. Salazar has indicated that the last set of rules on
retail competition and open access (RCOA) regime of the industry had already
been decided recently by the Commission.
“We decided last Thursday during our
strategic planning workshop, we already resolved all the issues… this will be
the last in the series of rules,” he said.
Salazar explained that this will
categorically end the era of the local RES, which has been the DUs’ retail
supply arm in servicing contestable customers within their franchise area.
Contestable customers are those
mandated by law and other relevant edicts to have “the power of choice” when it
comes to their power supply contracting or procurement.
In the restrictions imposed, he
noted that “the DUs definitely cannot be in retail supply, although they can
still form their own RES (retail electricity supplier) affiliate.”
The constraints set would be for
their RES affiliates having their own sets of management and board of directors
– and a business portfolio completely unbundled from their power distribution
venture.
“They cannot have the same
directors, they can’t have the same office and facilities and they can’t also
have the same set of officers,” Salazar expounded.
The termination of local RES will
commence at the targeted mandatory enforcement of retail competition by June
next year at the prescribed lower threshold of 750 kilowatts.
Salazar said the other earlier-set
conditions on 50-percent level of RES procurement from generation-company
affiliates; as well the 30-percent market share cap based on peak demand, will
also be carried in the soon-to-be-released ERC rules.
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