GenCos alarmed by SC’s TRO on power retail competition

By Myrna M. Velasco – February 28, 2017, 10:00 PM

from Manila Bulletin

Power generation companies (GenCos) have been spooked and are seriously alarmed over implications on future investments of the recent temporary restraining order (TRO) from the Supreme Court that effectively stopped the enforcement of retail competition and open access (RCOA) in the industry.

Having an indefinite tenor, the high court’s restraining order symbolically spun the power sector players in the whirlpool once again, with them indicating that the short- to long-term impact could be halt in capital flow as some investors had viewed the RCOA phase of the restructured electricity sector as a form of market incentive.

It is also seen detrimental to the end-users, because recent ‘market war’ in the power sector already thrived on “offering the lowest of the low prices versus competitors” just to corner contestable customers for a contract. Contestable customers belong to the segment of end-users who can already exercise freedom of choice on their power contracting with preferred retail electricity suppliers (RES) licensed by regulators.

The Philippine Independent Power Producers Association (PIPPA), stressed that “it notes with concern, the SC TRO indefinitely enjoining the implementation and enforcement of the regulations issued by the Department of Energy (DOE) and Energy Regulatory Commission (ERC) on RCOA.”

The retail competition state for the power industry was first instituted on “voluntary basis” in 2013, and could have been enforced mandatory starting February 26 this year – but then the restraining order from the high court came.

Heaps of contestable customers effectively exercised ‘choice’ as could be gleaned on the volume of power supply agreements already signed prior to the originally set deadline of February 26. That was until the issuance of the SC verdict on the petition filed by the Philippine Chamber of Commerce and Industry (PCCI), San Beda College Alabang, Inc., Ateneo de Manila University and Riverbank Development Corporation.

The GenCos said “the recent TRO issued by the Supreme Court has the effect of putting on hold aspects of the RCOA, specifically the timeline for lowering of thresholds.”

PIPPA asserted it is in full support of RCOA’s implementation. But at this time, the group of power producers can only hope that “the issues before the Supreme Court will be resolved with finality at the soonest possible time.”

As this developed, Bayan Muna Chairman Neri Colmenares prodded the ERC “to investigate reports that Meralco is pressuring its customers to rescind contracts with their suppliers in light of the TRO.”

In response, ERC Chairman Jose Vicente B. Salazar said “we have been closely monitoring the retail market for any irregular or unscrupulous behavior by industry players following the recent issuance of the TRO by the Supreme Court.”