Mandatory open access eyed this year

by Myrna Velasco, 25 February 2015
from Manila Bulletin

Mandatory retail competition and open access will finally be implemented this year at a threshold that will be lowered to 750 kilowatts (kw), according to Energy Secretary Carlos Jericho L. Petilla.

The energy chief said there is already consensus with the Energy Regulatory Commission (ERC) to make RCOA mandatory by the end of this year.

This will be a shift from the ‘voluntary basis’ or ‘the trial phase’ of competitive retail regime  for contestable customers in the power industry – which started at 1.0 megawatt threshold upon its implementation in 2013.

PETILLA, Manila Bulletin

“We came to an agreement, we are trying to hit mandatory open access by end of the year… at a threshold of 750kw” Petilla averred.

He added: “my suggestion to the ERC is like this — it will be mandatory, however, if there are no suppliers, for as long as you sign up with a plant that is about to be built, and you have a PSA (power supply agreement) that was already applied with the ERC …even if that’s just an application, not necessarily approved — that would already be considered compliance.”

The Electric Power Industry Reform Act (EPIRA) prescribes the enforcement of RCOA in the restructured electricity sector to finally put the customers at the head of the table when it comes to choosing their power suppliers.

The initial threshold was prescribed at 1.0MW of peak demand of the qualified contestable customers, and that level shall be brought down to 750kw after two years from the kick-off point. The step forward into bringing that threshold lower until it reaches households shall be determined by the ERC.

Petilla reiterated that he already had discussions with ERC Commissioner Alfredo J. Non on such proposal of accelerating mandatory open access with a lower threshold – in contrast to the regulatory body’s recommendation of reaching that phase of the policy by 2019.

“Why I am saying this? I talked to Commissioner Non, and we will just fine-tune some details,” he reiterated.

Petilla expounded that his proposal was anchored on the need for suppliers of sizeable contestable customers — but their foray into competitive retail sourcing of electricity had been impeded by supply lack.

“There’s about 1,300 MW of contestable customers who are still captive…what makes me think that by the end of the year we can have mandatory open access? Because there would already be supplier if they become contestable,” the energy chief noted.

He explained these customers have remained ‘captive’ or had to remain with their franchised distribution utility “because there had been no supply…but if we don’t make it mandatory, they will just take it as optional forever.”

He nonetheless emphasized that if a customer will sign a contract with retail electricity supplier (RES), “for example with a plant that will be on-line in 2019, our discussion is: I will be negotiating with the ERC if their original resolution which says that a plant owner cannot have RES, if that will be reversed.”

Petilla stressed he was precluded from doing that because of a pending case at a regional trial court contesting the ERC’s rules. “I cannot negotiate with ERC if there is a case. So for me, I want the case dropped first, then I will negotiate with the ERC after,” he said.

The energy chief added “I am confident that I can sway it… that DUs and power generation companies which will own RES, as long as the case is no longer there, then it will be okay.”

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