Court’s TRO hinders power supply competition

by Alena Mae S. Flores – October 19, 2017 at 07:24 pm


The Energy Regulatory Commission on Thursday expressed concern over its inability to issue new retail electricity licenses in the wake of the temporary restraining order issued by the Supreme Court against retail competition and open access.

“The ERC has received inquiries and letters of concern from the RES [retail electricity suppliers] regarding the renewal of their licenses and the effect of the non-renewal of the same,” the regulator said in an executive summary.

“These RES contend that the non-issuance of a RES license would greatly affect their operations and likewise put the contestable customers who they have effective contracts with at a disadvantage,” ERC said.

The commission said the issuance of the TRO put on hold operational matters of the RCOA, such as the issuance of licenses in favor of retail electricity suppliers and the lowering of threshold of contestability.

RCOA gives the consumers, initially those with one megawatt of average monthly consumption, the power to chose their own suppliers.

The threshold level shall be lowered to 750 kilowatt-hour users until it reaches the household level as mandated under the Electric Power Industry Reform Act of 2001.

“These [issuance and extension of RES licenses] are integral to the mandate of the ERC in promoting competition and ensuring customer choice pursuant to the provisions of Epira,” the document said.

ERC said the SC decision effectively barred the entry of new players in the electric power industry.  There are currently 14 license applications, of which seven are new and seven are up for renewal.

The new applications included those of Solar Philippines Retail Electricity Inc., Green Energy Supply Solutions Inc., Green Core Geothermal Inc., Megawattsolutions Inc., Trademaster Symbior Rooftop Inc., Energy Trading Management Corp. and Asia Pacific Energy Corp.

Applications for license renewals include those of DirectPower Services Inc., Ecozone Management Inc., GNPower Ltd. Co., PRISM Energy Inc., AdventEnergy Inc., Aboitiz Energy Solutions Inc. and Phinma Energy Corp.

Of the seven applications for renewal, five already expired, including those of DirectPower, Ecozone Power, GNPower, Prism and AdventEnergy.  These would affect a total of 144 contestable customers with a combined demand of 267.16 MW.

“In the absence of any safety nets available for these customers, in all probability, they could be subject to the imposition of the much-higher supplier of last resort rate,” ERC said.

ERC said the TRO also eliminated the participation of the 750 kW users from RCOA.

ERC said that while it was willing to comply with the TRO, “the uncertainty and unrest in the electricity industry because of the non-implementation of the assailed issuances compelled it to seek refuge from the SC.”

The Energy Department said it remained bullish that RCOA would spur  competition among power retailers despite the legal challenges.

“We have to properly explain to the industry players our way forward in implementing the power of choice provisions of the Epira and one of them is the provision on retail competition and open access,” Energy Secretary Alfonso Cusi.