Published November 30, 2017, 10:00
PM By Myrna M. Velasco
Independent entity Energy Regulatory
Commission (ERC) has been directed by the Department of Energy (DOE) to craft
the guidelines on the lowered threshold of retail competition and open access
(RCOA) policy in the power industry that will already reach consumers within
the 500 kilowatts (kW) consumption base.
That has been based on a Circular
that was signed by Energy Secretary Alfonso G. Cusi this week, effectively
lowering the base of power retail competition to initially 750kW on voluntary
basis and to lower it further next year to 500kW via aggregation or the pooling
of capacity needs within contiguous or adjacent areas.
“For the proper implementation of
the policies set herein, the ERC is hereby enjoined to promulgate the supporting
guidelines, including but not limited to, the licensing of the RES (retail
electricity supplier) and retail aggregation,” the DOE Circular has stipulated.
The RES cannot operate or offer
capacity to qualified contestable customers without first securing required
licenses from the ERC. As prescribed, the contestable customers are the
end-users that are already allowed by relevant policies and regulatory
frameworks to exercise their freedom of choice on securing electricity service
and underwriting power supply contracts with preferred suppliers.
The DoE Circular further noted that
the ERC guidelines shall “specify sanctions and penalties that may be imposed
to electric power industry participants for violations of the promulgated
policies and guidelines.”
As set forth by the energy
department, contestable customers with peak demand from 750kW and above for the
preceding 12 months can already voluntarily participate in the RCOA upon the
effectivity of the Circular and following registration with the Philippine
Electricity Market Corporation (PEMC) being the central registration body of
the competitive retail market.
For demand aggregation that shall
essentially cover households within a contiguous area, it is targeted for
implementation on December 26, 2018. Even with this new DOE Circular though,
these propounded voluntary enforcements of power retail competition would still
need to hurdle major legal stumbling block on a pending case at the Supreme
Court.
DOE officials previously indicated
that they will file a motion with the high court using the Circular as basis on
a plea for the lifting of the TRO previously rendered against the power
industry’s retail competition rules and policies.
RCOA is presently stalled at the
1.0-megawatt threshold and done on voluntary basis following the Supreme Court
ruling that effectively junked a previous Circular of the DOE and the rules
issued by the ERC.
The questioned provisions included
the mandatory enforcement of RCOA; the cost premium to contestable customers
that would not have been able to switch on the prescribed deadline; and the
prohibition of the local-RES of the distribution utilities (DUs) to continue
with their respective power retail business units.
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