ERC to give large power users more time to find suppliers under RCOA scheme

Posted on November 03, 2016
http://www.bworldonline.com/content.php?section=Economy&title=erc-to-give-large-power-users-more-time-to-find-suppliers-under-rcoa-scheme&id=135816

THE Energy Regulatory Commission (ERC) has given consumers with an average monthly peak demand of 1 megawatt (MW) more time, or until Feb. 27, 2017, to secure a supply contract with a retail electricity supplier (RES).

In a yet to be published resolution, the ERC said “the forthcoming December 2016 deadline may no longer be a feasible time frame for contestable customers to prudently negotiate and eventually migrate to the competitive retail electricity market.”

No other dates were changed in the previous Resolution 10, which was issued on May 12, 2016. Dec. 26, 2016 was the previous mandatory date for the 1-MW “contestable customers” or those who are required to leave a distribution utility’s captive market to become power users who actively negotiate retail supply contracts.

The new deadline is the latest development in the ERC’s goal to enforce the rules on retail competition and open access (RCOA), one of the requirements of Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

With the new date, the 1-MW contestable customer should have entered into a supply contract with a licensed retail electricity supplier 60 days before the new mandatory contestability date. The latest would be around the last week of December 2016.

By that date, the retail supplier should have informed the distribution utility that serves the consumer about the plan to switch as called for under the previous ERC resolution.

The ERC did not immediately respond to a query if the other RCOA deadlines would be affected. Under Resolution 10, consumers with an average monthly peak demand of 750 kilowatts (kW) are mandated to enter into a supply contract by June 26, 2017.

The lowering of the threshold to cover consumers with an average monthly peak demand of 500 kW is by June 26, 2018, but subject to the review of the performance of the retail market by the ERC.

“Corollarily, in its review of the performance of the retail market, the ERC shall establish a set of criteria as basis for the lowering of the contestability threshold,” the regulator previously said.

The ERC also did not change the June 26, 2018 target date for retail aggregation, which would allow suppliers of electricity to contract with end-users whose aggregate demand within a contiguous area is at least 750 kW.

In the new resolution, the regulator said: “During the period from effectivity of the instant Resolution until mandatory contestability, all concerned stakeholders are enjoined to act in accordance with the ERC-issued Code of Conduct for the Competitive Retail Market Participants and to refrain from committing behavior or conduct which is anti-competitive in character. Any party found in violation thereof shall be subject to fines and penalties as the ERC may impose.”

The original Dec. 26, 2016 deadline became unfeasible after Manila Electric Co. (Meralco) filed on May 27, 2016 a petition for declaratory relief with application for temporary restraining order (TRO) and/or writ of preliminary injunction against the issuances of the Department of Energy (DoE) and the ERC.

In its filing with Branch No. 157 of the Pasig City Regional Trial Court (RTC), the utility assailed Sections 2 and 3, Article 1 of the 2016 Revised Rules Governing the Issuances of Licenses to Retail Electricity Supplier and Prescribing the Requirements and Conditions Therefor; the Revised Rules for Contestability; and, the Resolution Imposing Restrictions on the Operations of Distribution Utilities and Retail Electricity Suppliers in the Competitive Retail Electricity Market.

On July 13, 2016, the Pasig RTC granted a writ of preliminary injunction prohibiting the implementation of the ERC issuances. The ERC questioned the jurisdiction of the Pasig court by filing on July 5, 2016 a petition for certiorari and prohibition before the Supreme Court. The DoE also questioned the Pasig court’s jurisdiction by filing a similar petition with the high court on Sept. 27, 2016.

On Oct. 10, 2016, the Supreme Court acted on the DoE petition and issued a TRO preventing Branch 157 from continuing with the proceedings in Meralco’s Special Civil Action No. 4149-PSG and from enforcing all orders, resolutions and decisions rendered in the said case, effective immediately until the petition is finally resolved.

In its still unnumbered resolution, the ERC said it had received “communications and inquiries from contestable customers and distribution utilities seeking confirmation on the actual implementation of the mandatory contestability.” The resolution takes effect immediately after its publication in a newspaper of general circulation. -- Victor V. Saulon