PEMC says 20 apply so far to be ‘contestable’ electricity consumers

http://www.bworldonline.com/content.php?section=Corporate&title=pemc-says-20-apply-so-far-to-be-&145contestable&8217-electricity-consumers&id=128684

THE PHILIPPINE Electricity Market Corp. (PEMC) has received applications from electricity end-users who wish to become “contestable consumers” and have the option to choose their retail electricity supplier (RES), the company said on Tuesday.

“Right now we have received 20 applications from 750-kilowatt-hour (kW) CCs [contestable consumers] wishing to be part of the retail market,” said Phillip C. Adviento, PEMC training and communications manager, said in a briefing yesterday.

This comes as the Energy Regulatory Commission (ERC) has finally issued the dates during which contestable consumers are required to buy their electricity supply from RES initially on a voluntarily basis and eventually on a mandatory basis.

“The lowering of threshold will take effect on June 26,” he said, referring to end-users with a peak demand of between 750kW and 999kW for the past 12 months. The ERC set the mandatory contestability deadline for December.

PEMC, a non-profit, non-stock corporation, acts as the governance arm of the wholesale electricity spot market (WESM), which is the venue for trading electricity in the country.

Through a Department of Energy (DoE) circular, PEMC was designated as central registration body, an independent entity assigned to undertake the required processes, information technology, and other systems capable of handling customer switching and information exchange among retail electricity market participants.

On Dec. 26, the requirement to secure a retail supply contract will become mandatory for those consuming at least 1 MW. For the 750-kW to 999-kW consumers, the mandatory date is June 26, 2017.

The lowering of the threshold to cover end-users consuming at least 500 kW is set for June 26, 2018.

Mr. Adviento said of the 20 applicants, 19 are from MPower. Meralco serves as a local RES within its franchise area under a separate unit called MPower. The other application is from a distribution utility in Subic Enerzone Corp.

Based on the ERC resolution, the Meralco unit has to wind down its operations within three years, making it prudent for the largest distribution utility in the country to set up an affiliate to function as a retail electricity and secure a license from the regulator, he said.

Mr. Adviento said Meralco holds about 50% of the contestable consumers in the retail market.

On May 27, however, Meralco asked the court to rule whether the rules issued by energy regulators to fully implement retail competition and open access (RCOA) in the Philippine power industry is in line with the law.

Among other issues, Meralco said its interests and those of the DoE and the ERC “are adverse.” It said the circular and the two resolutions “violate [Meralco’s] statutory right” under Section 29 of the Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, to engage in the business of supply of electricity” to the contestable market.

Aside from directing local RES’s to wind down its business within three years from the effectivity of the resolution, the ERC also told these suppliers to no longer sign or execute any retail supply contracts.