AboitizPower wants binding contract for big ‘captive’ customers

February 6, 2018 By Victor V. Saulon, Sub-Editor

http://bworldonline.com/aboitizpower-wants-binding-contract-big-captive-customers/

ABOITIZ POWER Corp. (AboitizPower) wants big electricity users who opt to stay as captive customers of distribution utilities to also be required to enter into a binding contract for a definite period similar to what is imposed on those who switch to retail electricity suppliers (RES).

“If you are a potential contestable customer, you then decide whether you want to be contestable or you want to be captive. Either way, if you go contestable there are contracts — two years, three years, five years, whatever it is,” Antonio R. Moraza, AboitizPower president and chief operating officer, told reporters.

“The same should apply [to] captive [customers]. You have to commit to the utility that you will stay with them for so long so that they can also commit that requirement to the generator. I think that’s just fair,” he added.

At present, an electricity user whose consumption for the past year has reached an average of at least 1 megawatt (MW) a month are required to buy power from licensed retail electricity suppliers.

Regulations that make the switch from being a captive customer of a distribution utility (DU) are meant to foster greater participation from new players, thus spurring competition and lowering power costs.

These rules covering retail competition and open access (RCOA) are meant to apply first to the 1-MW users, although the threshold will be gradually lowered until they reach the consumption of a regular household.

However, the lowering of the threshold has since been put on hold after the Supreme Court issued a temporary restraining order (TRO) in response to a complaint by some sectors pointing, among others, to RCOA’s mandatory provisions.

Although the Department of Energy (DoE) has issued new regulation that makes the switch voluntary, Mr. Moraza said customers that had contracted with licensed RES remain confined to those using 1-MW and above.

The Energy Regulatory Commission (ERC) earlier said it would wait for the lifting of the TRO before taking any action as called for by the new DoE circular.

“What we want to suggest is that on the DU side, it also has to be contracted. In other words, you can’t say: ‘No, I want to stay with the DU’ and then next week change your mind because the DU is also going backward and contracting capacity in your behalf then all of the sudden you just change your mind,” Mr. Moraza said.

Mr. Moraza said he was speaking on behalf of AboitizPower’s distribution utilities. The company also has licensed retail electricity supplier units, either on its own or under subsidiaries or affiliates.

Asked if the proposal has been formally presented to regulators, Mr. Moraza replied: “We’re always talking. Us, the industry, we’re always in dialogue with DoE, ERC.”

Towards the end of last year, the DoE signed a new circular that will reverse contentious provisions of a previous circular as well as resolutions from the ERC requiring contestable customers to move away from being part of the captive market of a distribution utility.

The new circular will also allow the ERC to continue issuing licenses to retail electricity suppliers, which was among the provisions placed on TRO as sought by a number of educational institutions and a business group. The order was issued by the high court in February 2017.

RCOA is called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), the law that restructured the power sector, as well as its implementing rules and regulation.