No new market share limits for GenCos until next March

By Myrna M. Velasco – November 20, 2016, 10:01 PM

from Manila Bulletin

Power generation companies (GenCos) are not obligated to comply with new market share caps until March, 2017, according to a new resolution from the Energy Regulatory Commission (ERC).

The ERC noted that it resolved “to further hold in abeyance the issuance of the annual resolution setting the installed generating capacity per grid and for the national grid and the market share limitation per grid and for the national grid until 31 March 2017.”

The regulatory body emphasized it “finds necessity in further deferring the issuance of the annual resolution” as it has yet to complete its study on the matter.

Market share caps prescribe the megawatt capacities that each GenCo can own – reconciled with all the portfolios held by its affiliates including the emergence of retail suppliers under Retail Competition and Open Access.

To mandate grid limit that each power generator shall own, operate or control, the ERC has to calculate it to be 30-percent of installed capacity within that particular grid.

Additionally, the market share cap on national basis shall be estimated to be 25-percent of total national installed capacity.

The ERC previously indicated that it has been re-studying concerns relating to ownership and ‘dispatch control’ of power plants that may affect the limits on market share of some industry players.

Also, the regulatory body has to settle concerns on ‘double counting’ of capacities that GenCos may have relative to their establishment of retail electricity supplier (RES) affiliates.

The prescription of market caps or share limits for each power generation player had been anchored on the need to stimulate competition and prevent the dominance of a single player in the restructured electricity sector. This is mandated under Section 45 (a) of the Electric Power Industry Reform Act.

It was further cemented through the provisions of Section 4, Rule 11 of the implementing rules and regulations (IRR) of the EPIRA.

If original timeframe been followed, the new market share caps should have been due as early as March 15th this year, and shall be adjusted accordingly on a yearly basis.