DOE blinks on mandatory power retail competition, open access

By Myrna M. Velasco – January 21, 2017, 10:00 PM

from Manila Bulletin

The Department of Energy (DOE) will likely change its mind on the mandatory implementation of the retail competition and open access (RCOA) for end-users with lower limit usage of 1.0-megawatt, as originally targeted February this year.

Energy Undersecretary Felix William Fuentebella said the department is considering that retail competition in the 1.0MW threshold be sustained as ‘noncompulsory’ considering the various concerns raised by affected stakeholders and relevant customer segments.

“For the mandatory RCOA, Secretary (Alfonso Cusi) said, we have to look at it again. This is not only based on the new legal questions raised against the policy, but for us to assess if the reasons being raised are valid…if they are, then we have to revisit that,” he stressed.

Fuentebella added “there are still ongoing consultations, so we will base decision from that – if we need to keep RCOA at 1.0MW threshold still optional.”

Any adjustment on timeframe, he said, shall be discussed with the Energy Regulatory Commission (ERC), the key implementing agency of the competitive retail phase of the restructured electricity sector.

The ERC initially thought out of June, 2017 timeline for the mandatory phase of retail competition in the 1.0MW threshold, but the DOE later prevailed on its proposed February, 2017 deadline for contestable customers to sign contracts with retail electricity suppliers (RES) relative to their power needs.

Contestable end-users belong to the “unrestricted segment” or those with prescribed level of consumption that can already exercise their power to contract or freely choose their electricity suppliers. This is a move away from the traditional set-up of being dependent on the services rendered by franchised distribution utilities (DUs) and electric cooperatives.

From the initial threshold of 1.0MW, this has been anticipated to be brought down to 750 kilowatts (kW), purportedly on a parallel timeframe which is June this year.

With lowered consumption level for mandatory participants in retail competition, it is expected that contestable end-users listed by the operator of the Wholesale Electricity Spot Market (WESM) would grow by additional 353 customers. That roll currently has 437 customers at the voluntary phase yet of RCOA.

Retail competition is almost the last-mile of reforms expected from the Electric Power Industry Reform Act (EPIRA), but this is the juncture wherein Filipino consumers have massive expectations that they can finally benefit from lower electricity rates and much-improved services.