TO attract more power investors, the Department of Energy (DOE) is pushing for “mandatory” retail competition and open access implementation for power consumers who have an average monthly demand of 750 kilowatt-hours (kWh) or higher this year.
Energy Secretary Carlos Jericho Petilla said he has initiated talks with the Energy Regulatory Commission (ERC) regarding the move, as mandated under the Electric Power industry Reform Act of 2001.
“We came to an agreement, we will try to hit the mandatory open access by the end of the year at the 750 kWh threshold,” Petilla told reporters.
Under the present open access policy, only power users with a monthly average demand of one megawatt (MW) or higher are allowed to choose their own suppliers.
But EPIRA mandates that the threshold for open access should be lowered to 750 kWh from 1 MW two years after implementation. Open access was implemented in December 2013.
According to the energy chief, there are still large power users with total demand of 1,300 MW who have not switched suppliers or remains captive customers of their distribution utilities (DUs) because open access is still voluntary.
“Take note, the reason why they remain captive is because they have no [alternative]supplier,” he said.
The government decided to initially implement open access voluntarily due to difficulties faced by the costumers.
He said the mandatory open access policy will also allow DUs to participate in retail competition, even without a current supplier, as long as they have submitted a Power Supply Agreement (PSA) to the (DOE).
“The mandatory level is not whether you have a supplier the time that you switched, they will supply to you. For me if you have a PSA, you can join but you are considered captive in the meantime,” said Petilla.
Petilla also said the issue of who will supply the power users under the lower threshold should be addressed.
Along these lines, Petilla said he has asked the ERC to reverse its resolution that power plants cannot be retail electricity suppliers.
ERC executive director Francis Saturnino Juan earlier said that they haven’t issued any decision on lowering the threshold to 750 kWh as they are still assessing the performance of the market.
Despite the absence of the ERC decision, the Philippine Electricity Market Corp. (PEMC), operator of the Wholesale Electricity Market, has started the market design research in preparation for the implementation of the lower threshold for retail competition and open access.