DOE to relax policy on 750-kw threshold for RCOA

By Myrna M. Velasco – February 24, 2017, 10:00 PM

from Manila Bulletin

The Department of Energy (DOE) is set to issue revised rules that will relax terms and conditions on the switching of customers to retail competition and open access (RCOA) for those in the 750-kilowatt (kwt) threshold.

Energy Secretary Alfonso G. Cusi said they will likely come up with the new DOE Circular prior to the targeted timeline for the lowered 750kw threshold by June.

“While we are doing voluntary for 1.0-megawatt, I am preparing for June,” he said, further noting that by then, there will be new set of policy that will be guiding the industry to the competitive retail regime of the sector.

The energy chief explained that they are thinking along the lines of making the ‘power of choice’ for consumers voluntarily – meaning, they may opt to go with retail electricity suppliers (RES) or may still stay as captive customers with franchised distribution utilities.

The energy department is also seriously weighing the parameters on the proposed disbandment of the local RES (L-RES) for distribution utilities (DUs) as this has been among the “rules restraints” questioned in the High Court.

He said they will have to look at the extent of cross-subsidization that is being thrown against the DUs engaged both in serving captive customers and running their respective local RES entities.

As of Friday, the department noted that 69 customers already sought for deferment of RCOA switching registrations with spot market operator Philippine Electricity Market Corporation.

Cusi said their unified statement as to the way forward following the Supreme Court temporary restraining order (TRO) is to let the signed contracts – both in the 1.0MW and 750kW thresholds be processed already – with the mutual consent of parties in the supply deals.

He qualified that such shift to the RCOA phase of the industry may still be done on ‘voluntary basis’, so as not to violate the ultimate court’s restraining order.

As of this writing, there are 50 contestable customers in the 750kW threshold that already exercised option on their supply contracting with their preferred RES entities – nevertheless, some of them also batted for deferment of their switching registration.

In a press statement, the energy department emphasized that “those who have already executed retail supply contracts (RSCs) and were already registered and switched shall continue to honor their respective RSCs.”

It reiterated that “ongoing applications for registrations filed before the Central Registration Body (CRB) may proceed voluntarily.”

And for applicants who wish to withdraw or defer their respective registrations, they may do so “consistent with the retail market rules provided that the CRB shall not be liable for any legal repercussions that may arise out of the contestable customers’ contractual obligations.”