Mandatory RCOA is on this month

By Myrna M. Velasco – February 5, 2017, 10:01 PM

from Manila Bulletin

The long-wished for “freedom of choice” will finally put electricity consumers at the head of the table when it comes to their preferred power supply contracting befitting their budgets, with the decision of the regulators and policymakers to give mandatory retail competition and open access (RCOA) a final “go signal.”

The Energy Regulatory Commission (ERC) will uphold the February 26, 2017 cut-off timeline for contestable customers within the prescribed mandatory threshold of one-megawatt to secure their power supply contracts with the 27 licensed retail electricity suppliers.

“We agreed to maintain the deadline of February 26, 2017 during our tripartite meeting last Tuesday (January 31),” ERC Chairman Jose Vicente B. Salazar said.  The tripartite committee includes the Department of Energy (DOE) being the policy implementing agency; and the Philippine Electricity Market Corporation, as the central registration body for contestable customers in the Wholesale Electricity Spot Market.

Contestable customers refer to the segment of end-users that can already exercise their choice when it comes to negotiating, contracting and/or purchase of their electricity requirements. From the mandatory 1MW RCOA phase this February, that will go down to 750 kilowatts threshold by June this year.

In the interim, Salazar disclosed that there is concurrence to “peg the SOLR (supplier of last resort) premium to zero-percent until August 26, 2017.” SOLR would refer to the alternative source of supply for qualified RCOA customers that may not be able to corner RES contracts at the prescribed February cut-off date.

“We will discuss this proposal, and hopefully, finalize the SOLR rules in the next few days,” the ERC chief has emphasized.

Prior to the mandated deadline, competition in cornering customers had gone too intense for many of the licensed RES – that some of them have been signing up contracts in the hundreds in recent months.

RES entities noted that since many contestable customers are still not familiar with the terrain of RCOA-underpinned power supply contracting, they also took the pain of educating and explaining to them the pros and cons of such policy enforcement.

Prior to this phase of compulsory contracting, the ERC has likewise been studying industry stakeholders’ bid to extend the three-year winding down period primarily for contracts entered into by the local retail electricity supplier (Local RES) units of distribution utilities (DUs) – but with provision for more seamless switching of contestable customers.

A local RES would refer to the power retailing license granted to the DUs so they can continually serve contestable customers within their franchise areas.

The ERC has been batting for a “better coordinated position” on the matter, and such must give merit to various positions of industry players– including the Retail Electricity Suppliers Association (RESA) which also has Manila Electric Company and other Local RES licensees among its members; and the Philippine Independent Power Producers Association Inc.