Power producers ‘concerned’ by SC TRO on retail competition

Posted on February 28, 2017
http://www.bworldonline.com/content.php?section=Economy&title=power-producers-&145concerned&8217-by-sc-tro-on-retail-competition&id=141344

INDEPENDENT power generation companies on Monday expressed their concern over the move by the Supreme Court (SC) to block the rules to implement the energy sector’s rules on retail competition and open access (RCOA).

In a statement, the Philippine Independent Power Producers Association (PIPPA) said it “notes with concern” the high court’s temporary restraining order (TRO) indefinitely enjoining the implementation and enforcement of the regulations issued by the Department of Energy (DoE) and the Energy Regulatory Commission (ERC) on RCOA.

“The RCOA is mandated by the Electric Power Industry Reform Act of 2001 (EPIRA) but implemented only in 2013. It aims to institutionalize competition in the supply of electricity, allowing the electricity end-users to choose their suppliers based on low price and other factors,” it said.

“The recent TRO issued by the Supreme Court has the effect of putting on hold aspects of the RCOA, specifically the timeline for lowering of thresholds,” it added.

“PIPPA supports the implementation of RCOA and hopes that the issues before the Supreme Court will be resolved with finality at the soonest possible time,” it said, adding that it supports the move from the DoE and ERC for a unified policy on RCOA.

“We hope that this will finally settle the issues and the industry will already move forward to attain the objectives of EPIRA,” PIPPA said.

PIPPA’s statement came after the high tribunal issued the TRO on Feb. 21 against a department circular and four resolutions issued by the 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.

The DoE said it will be exhausting all remedies to see the implementation of RCOA, which is covered in 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.

Separately on Friday, the DoE, ERC and the Philippine Electricity Market Corp. (PEMC), said that because of the “legal complexities” surrounding the TRO they were still in the process of drafting a general advisory for the guidance of RCOA stakeholders, without prejudice to future issuances.

The issues they are considering are whether those who have executed retail supply contracts (RSCs) and were already registered and switched shall continue to honor their respective contracts; and ongoing applications for registration filed before the central registration body (CRB) may proceed voluntarily.

The issues include whether applicants who wish to withdraw or defer their registration before the CRB may do so consistent with the retail market rules provided that the CRB shall not be liable for any legal repercussions that may arise out of the contestable customers’ contractual obligations; and whether remaining contestable customers who have not yet secured their RSCs may continue to negotiate and exercise their power to choose.”

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

The court found no basis for the mandatory migration being ordered by the DoE and the ERC through the questioned issuances -- 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.

It noted the urgent need to issue a TRO because of the Feb. 26, 2017 deadline imposed by ERC for end-users to enter into a retail supply contract with an accredited RES.

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

Separately, Ateneo de Manila University and San Beda College Alabang in a joint statement expressed an optimistic view about the court decision.

“EPIRA clearly provides for the voluntary migration of end-users to the contestable market and there appears to be no basis for the mandatory migration ordered by ERC and DoE through their issuances,” the schools said. -- Victor V. Saulon