Modified electric service disconnection policy set

Updated April 27, 2020, 8:09 AM By Myrna M. Velasco
https://business.mb.com.ph/2020/04/26/modified-electric-service-disconnection-policy-set/

The Department of Energy (DOE) is modifying its policy on the disconnection of electricity services between suppliers to the load networks of power utilities

In a draft circular of the department, it fleshed out the rules and parameters on when disconnection of power services shall be enforced either by electricity suppliers like the generation companies (GenCos) or state-run Power Sector Assets and Liabilities Management Corporation (PSALM); the transmission operator National Grid Corporation of the Philippines (NGCP); the administrator of the feed-in-tariff allowance (FIT-All) collections National Transmission Corporation (TransCo); as well as the operator of the Wholesale Electricity Spot Market (WESM).

The power disconnection will be implemented at the level of the front-lining distribution utilities, to include the electric cooperatives. This policy will be similarly applicable to directly connected customers, which are primarily industrial and commercial end-users.

It has been specified that “the DOE or the ERC (Energy Regulatory Commission) may recommend the disconnection of electric power industry participants,” that are found to be in breach of proposed industry rules.

A major reason for electricity service disconnection, as stipulated in the proposed DOE rules, shall be non-payment of financial obligations within prescribed period – and this is applicable across the industry chain from the GenCos and PSALM; to NGCP; TransCo or the WESM operator.

Additionally for WESM, it was stated that non-registration within 15 days after the prescribed testing and commissioning of power facilities and without valid certification from the ERC shall be a valid ground for service disconnection.

At the same time, power service may be severed upon suspension and de-registration as a WESM member by trading participants like the GenCos; or if the GenCo-trading participant would fail in complying with the mandated submission of forecast output “with respect to must-dispatch generating units over a period of 30 days.”

Further, the failure of a distribution utility or directly connected customer to register as an indirect WESM member upon termination or expiration of its power supply agreement (PSA) with a GenCo shall likewise be a legal basis for service cut-off.

For NGCP as system operator, aside from non-payment of financial obligations, the transmission firm may disconnect a customer if it refuses to be accorded with metering services by a WESM-authorized provider.

In the case of PSALM, non-compliance of an off-taker (ca¬pacity buyer) on its financial payments as well as on the terms of the PSA could merit supply termination. Another ground for service stoppage would be non-remittance of universal charges (UC) collections.

On the part of TransCo, it can cut-off any power industry player in the supply chain if it fails in remitting FIT-All collections for at least two successive billing periods.

The DOE rules prescribe that “any attempt to obstruct the disconnection process, such as political intervention, should be avoided with the objective of mutually addressing the welfare of disconnected entities and the competitiveness of WESM.”

It was emphasized that prior to the request for service disconnection, “all remedies available, including disputes, should have already been exhausted.”