Energy department advises freeze on power supply talks for big users

Posted on February 24, 2017
http://www.bworldonline.com/content.php?section=Economy&title=energy-department-advises-freeze-on-power-supply-talks-for-big-users&id=141191

THE Department of Energy (DoE) has told big power users to put on hold negotiations to source supply from retail electricity suppliers ahead of a common stand from government agencies after the Supreme Court blocked regulations that called for retail competition and open access (RCOA) in the power sector.

“Freeze everything until the Supreme Court completes its hearings in accordance with the law,” said Energy Undersecretary Felix William B. Fuentebella in a new conference on Thursday at the DoE office in Taguig City.

The DoE’s advisory came after the high court issued a temporary restraining order (TRO) on Feb. 21 against a department circular and four resolutions issued by the Energy Regulatory Commission (ERC) less than a week before Feb. 26, the date when power users consuming an average of at least 1 megawatt (MW) per month are required to source power from a licensed retail electricity supplier (RES) and away from distribution utilities.

Mr. Fuentebella said the DoE, ERC and Philippine Electricity Market Corp. (PEMC) had scheduled a meeting to “hopefully come up with a unified statement by noon” on Friday.

“The unified statement is an advisory to all the players,” he said, adding that other market participants such as distribution utilities might be invited in the discussions.

Still, the DoE will be exploring legal options to implement the RCOA rules, he said, citing DoE Circular No. DC-2015-06-0010, series of 2015; ERC Resolution No. 5, Series of 2016; ERC Resolution No. 10, Series of 2016; ERC Resolution No. 11, Series of 2016; and ERC Resolution No. 28, Series of 2016.

“All remedies will be exhausted,” Mr. Fuentebella said.

During the briefing, he quoted Energy Secretary Alfonso G. Cusi as saying that the DoE was duty-bound to implement the law, which seeks to uphold the freedom of choice of the consumers and to promote market competition.

In issuing the TRO, the high court noted that the petitioners had established “a clear, legal right” considering that Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 provides for the voluntary migration of end-users to the contestable market.

It said that there appears to be no basis for the mandatory migration being ordered by the DoE and the ERC through the questioned issuances.

“Furthermore, it noted the urgent need to issue a TRO due to the February 26, 2017 deadline imposed by ERC for end-users to enter into a retail supply contract with accredited retail electricity suppliers,” the Supreme Court in a press briefer release on Feb. 21.

The high court said it acted on the case -- G.R. No. 228588 -- during its session that day.

“If a TRO is not issued, the petition will become moot and petitioners stand to suffer grave and irreparable injury because they will be disconnected from the distribution utility or made to pay a supplier of last resort a 10% premium between the higher contract cost and the Wholesale Electricity Spot Market,” it said.

The TRO was sought by Philippine Chamber of Commerce and Industry, San Beda College Alabang, Inc., Ateneo de Manila University and Riverbanks Development Corp. against the DoE, ERC et al.

It took effect immediately and until further orders from the court restraining the respondents its agents, representatives, and all persons acting in their place or stead from implementing the DoE circular and the four ERC resolutions. -- Victor V. Saulon