ERC asks Supreme Court to resolve open access competition

by Alena Mae S. Flores – July 07, 2016 at 11:50 pm

from Manila Standard Today

The Energy Regulatory Commission said Thursday it asked the Supreme Court to decide on a case filed by power retailer Manila Electric Co. that aims to suspend the implementation of retail competition and open access.

ERC said the Office of the Solicitor General filed a petition for certiorari and prohibition with the Supreme Court raising the case filed by Meralco before the Pasig regional trial court.

“We filed a petition before the SC last Tuesday, raising the assumption of jurisdiction of the trial court over the Meralco case and its issuance of a restraining order,” ERC spokesperson Rexie Digal said.

Pasig RTC branch 157 earlier issued a 20-day temporary restraining order in favor of Meralco, suspending the implementation of RCOA.

The regional trial court said in a decision that based on the documents presented, Meralco established compliance to the requisite requirements in support of the grant of the TRO.

“Thus, the petitioner’s prayer for temporary restraining order is hereby granted and the same is hereby issued enjoying the DoE [Department of Energy] from implementing and enforcing the DoE circular DC 2015-06-0010 and the ERC from implementing and enforcing its ERC Resolution No. 10 Series of 2016 and ERC Resolution No. 11 Series of 2016,” the lower court said.

Both circulars prohibited distribution utilities such as Meralco from engaging in the supply business, imposed market and other restrictions and required mandatory contestability.

Meralco asked the court on May 27 to issue a temporary restraining order and subsequently a writ of preliminary injunction. Meralco said permitting the implementation of the said issuances would violate the rights of the company and the other distribution firms and cause them to suffer “irreparable injury.”

ERC earlier said Meralco “had all the chance and opportunity to mitigate probable losses by virtue of the implementation of the RCOA.”

The regulator said Meralco knew since 2006 of the imminent transition from the captive market to the contestable market where customers could choose their own suppliers as these underwent public consultations.

ERC said the obvious consequence of the migration of the customers “is the change in the amount of profits it [Meralco] will earn, which by the way is not guaranteed even under its franchise.”

It said Meralco had sufficient time to set up its own retail electricity supplier-distribution utility affiliate. ERC said Meralco was not prevented from putting up its own retail electricity supplier and as a distribution utility it would still continue to participate in the contestable market as supplier of last resort.

The regulator  said Meralco would also not be affected by the 30-percent market cap, the initial threshold imposed by ERC.

MPower, Meralco’s retail electricity supplier, currently supplies 18 percent of the contestable market and ERC said it still had room to grow before reaching the cap.

ERC said Meralco also failed to show that it would suffer irreparable damage from the issuances.

ERC chairman Jose Vicente Salazar earlier said he was hoping that “Meralco will rethink its current position against RCOA, which gives consumers the power to choose their own suppliers.

“We can no longer set back gains of the power sector. It can only move forward and the direction is clearly that of competition,” Salazar said.

Salazar said he found no strong reason “for Meralco to block a mechanism which would be good for the retail customer base in its present service area.”

Salazar said RCOA marked a major milestone in the country’s bid to make electricity rates more affordable to end-users.

“RCOA is designed to change the current situation where customers do not have the choice as to who will supply their power requirements and are dependent on utilities designated purely on the basis of geographical territory,” Salazar said.