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SUPREME COURT ISSUED GREEN LIGHT ON RETAIL COMPETITION AND OPEN ACCESS (RCOA)

AT LAST, the Philippine Supreme Court released a temporary restraining order allowing the full implementation of an open retail market filed by MERALCO in May 27 of this year. Few months past after the Pasig Regional Trial Court – Branch 157 presiding Judge Gregorio Vega Jr. grated MERALCO’s plea for a temporary restraining order.

On 10 October 2016, the Department of Energy (DOE) together with the Energy Regulatory Commission (ERC) scored a victory with the recent Temporary Restraining Order (TRO) issued by the SC in allowing the full implementation of the Retail Competition and Open Access (RCOA).

RCOA is a provision of the Electric Power Industry Reform Act (EPIRA) of 2001.

DOE Secretary Alfonso Cusi is blissful that the Supreme Court saw the need to uphold the role of the DOE and ERC and is pivotal to the implementation of Electric Power Industry Reform Act (EPIRA) in giving consumers the power of choice, though he is aware that some distribution utilities are stopping it.

He explained that the previous set up is electricity customers were captured by the distribution utilities within their franchise area and were forced to pay the contracted supply of their respective distribution utilities.

Now, ERC is setting a shift to RCOA, which allows qualified consumers to source their electricity supply from competing retail electricity suppliers. Open access also allows them to use existing transmission and distribution systems as well as associated facilities but subject to the payment of ERC-approved rates.

According to Secretary Cusi, the DOE now is undergoing the preparatory stage to include consumers consuming 750 kilowatts as Contestable Customers. With RCOA in place, “Contestable Customers” or those consuming 1 megawatt (MW) of electricity are now able to choose their power supplier/s to reduce their costs.

The SC issued a TRO enjoining the Regional Trial Court, Branch 157, Pasig City, from continuing the proceedings in the Petition for Declaratory Relief filed by the Manila Electric Company (MERALCO) against the DOE and the Energy Regulatory Commission (ERC).

In the said Petition, MERALCO sought to nullify DOE Circular No. DC2015-06-0010 (released 19 June 2015) and related resolutions issued by the ERC, enjoining the DOE and ERC from implementing them.

Under DC2015-06-0010, electricity end-users with a monthly average peak demand of at least 1 MW for the preceding 12 months will be the Contestable Market upon initial implementation of the RCOA. Two (2) years afterwards, the threshold level for the Contestable Market will be reduced to 750 kilowatts (kW). Then, the ERC is required to evaluate the performance of the electricity market and gradually reduce the threshold level until it reaches household demand level.

Starting June 26, 2017, ERC also mandates those consuming at least 750 kilowatts to also buy electricity from ERC-certified suppliers as the regulator moves the retail power market towards greater competition as called for by Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA).

For end-users with an average monthly peak of at least 750 kW and 1 MW for the preceding 12 months, the date for voluntary contracting of electricity is set on June 26, 2016. This becomes mandatory on Dec. 26 for those consuming 1 MW, and on June 26, 2017 for those consuming at least 750 kW. # (Cathy Cruz)

 

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