DOE may snatch ERC’s ‘licensing role’ on retail power suppliers

By Myrna M. Velasco – April 12, 2018, 10:01 PM
from Manila Bulletin

With the never-ending dilemmas that the Energy Regulatory Commission (ERC) had been getting enmeshed with, the Department of Energy (DOE) is now intending to take hold of the former’s role as a licensing entity for retail electricity suppliers (RES) that shall be servicing the needs of contestable customers or those end-users that can already exercise power of choice on their electricity service preference.

“The Secretary (Alfonso G. Cusi) has already ordered our legal team to look into the law, we can no longer wait for the other agencies. No agency, no company can further delay this,” Energy Undersecretary Felix William B. Fuentebella stressed.

He added “trust me, our lawyers are already looking at it,” when asked by the media if such assumption of licensing task for the RES will require amendments in the law.

Fuentebella indicated the initial target of the DOE will be to spearhead RES licensing for retail suppliers under the Green Energy Option Program (GEOP) of the renewable energy (RE) sector, but such could also cover the conventional technologies just to centralize all RES licensing processes in just one government agency.

He stressed “we’re looking at the situation right now… we’re looking at the law,” emphasizing that legal remedies are being studied so the DOE can already dip its hands into this prospective obligation.

Some players in the power industry have indicated that RES licensing is a function duly vested upon ERC as could be gleaned under Section 29 of the Electric Power Industry Reform Act. In that particular provision, it was clearly stipulated that “all suppliers of electricity in the contestable market shall require a license from the ERC.”

Under the GEOP of the RE sector, however, a customer need not be in the prescribed threshold of customer contestability to be served by retail suppliers, hence, that is the legal opening that the DOE has been basing its forward action on the RES licensing proposition.

Industry stakeholders further deem that this latest bout of “role snatching” is just one in the series of tricky matters that have been widening the gap between the chiefs of ERC and the energy department – as both have been wrestling each other out in their tussle over expansion of territories.

Retail electricity licensing in the conventional technology domain had been temporarily snagged because of a temporary restraining order (TRO) previously rendered by the Supreme Court against the Retail Competition and Open Access (RCOA) policy in the industry.

That effectively hampered power retail competition at the 1.0-megawatt threshold level on voluntary basis, because the proposed capacity lowering to 750 kilowatts had likewise been restrained in the high court’s order.

That further tied the hands of the ERC in issuing new RES licenses, and while impeded, the DOE issued a Circular intending to “cure the defects” of the ERC rules on the RCOA policy in the sector.

On its initiative to rewrite the power retail competition rules, the DOE somehow gained fortified resolve to take on the RES licensing function and this is a proposal it is keenly advancing now.