By Danessa Rivera (The
Philippine Star) | Updated May 20, 2016 - 12:00am
MANILA, Philippines - The Energy
Regulatory Commission (ERC) has cleared the final rules for retail competition
and open access (RCOA), which will cover the transition of end users and
restrictions on distribution utilities migrating to an open electricity market.
The new rules for RCOA aim to
clarify and establish the conditions and eligibility requirements for end-users
in order to be part of the contestable market, ERC chairman Jose Vicente
Salazar said in his speech during the Power & Electricity World Philippines
2016.
While the commission has approved
the said rules, official notice will be released within the week, he said.
The new rules are intended to set
the threshold level for the contestable market to ensure that the efficient transition
towards full switch to retail electricity market in a timely manner, Salazar
said.
Contestable customers refer to
electricity end-users who are part of the “contestable market” or those who
have a choice of their supplier of electricity.
Currently, only contestable
customers with at least one megawatt (MW) demand are allowed to choose their
own suppliers of electricity, on a voluntary basis.
Starting June 26 this year, the
threshold for contestable customers will be lowered to 750 kilowatts.
Meanwhile, mandatory contestability
for customers with peak demand of one MW will take effect on Dec. 26, 2016.
For 750 kw and above, mandatory
contestability is scheduled to take place six months after or on June 26, 2017.
The reduced threshold to cover 500
kw to 749 kw is set on June 26, 2018, subject to the review of the performance
of the retail market by the ERC.
The new rules also modified
restrictions on the operations of retail electricity suppliers (RES) in the
competitive retail electricity market, Salazar said.
Under the rules, no distribution
utility (DU) will be allowed to service contestable customers until supply is
made in its “capacity as a supplier of last resort.”
The rules also stated all local RES
or DUs currently engaged in the supply of electricity to end users in their
franchise area are required to wind up their business within three years from
the effectivity of the rules.
“This means existing retail
supply contracts or RSC entered into with their respective contestable
customers shall remain valid until the expiration of said contracts subject to
the winding down period,” Salazar said.
“This also means that no new
retail supply contracts shall be signed, executed, and be allowed after the
effect of the resolution, and no renewal of retail supply contracts shall
likewise be allowed,” he said.
No RES will also be allowed to
supply more than 30 percent of the total peak demand in the retail market and
transact transact more than 50 percent of its supply business with its
affiliate contestable customers.
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