The Energy Department said it will implement Retail Competition and Open Access (RCOA), a key provision of Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) even as the Supreme Court (SC) issued a temporary restraining order (TRO) on February 21.
The SC granted the petition filed by the Philippine Chamber of Commerce and Industry, San Beda College Alabang Inc., Ateneo De Manila University, and Riverbanks Development Corp. to stop the implementation of RCOA by the Department of Energy (DoE) and Energy Regulatory Commission (ERC).
Under RCOA, customers with monthly average peak demand of at least 1 megawatt, the ERC dubbed as contestable customers (CCs), can choose their energy supplier.
These suppliers, known as Retail Electricity Suppliers (RES), will directly negotiate and contract on a wholesale level with power-generation companies so they can sell electricity to CCs at competitive rates.
This is currently being implemented on a voluntary basis at a threshold of 750 kilowatts, largely among industrial consumers such as firms located in export processing zones. The February 2017 timeline for mandatory contestability kick starts a process that will gradually free more consumers from the captive market, until the power to choose reaches the household level.
The DoE said its mandate is to implement the law and consumers should have the freedom of choice as to which power provider they prefer to deal with.
In an earlier statement the SC public information office said, “The Court noted that petitioners have established a clear, legal right to the TRO considering that the EPIRA Law provides for the voluntary migration of end-users to the contestable market and there appears to be no basis for the mandatory migration being ordered by the DoE and the ERC through the questioned issuances.”
The SC also deemed the issuance of TRO urgent due to the February 26 deadline the ERC imposed for end-users to enter into a retail supply contract with accredited retail electricity suppliers.
Petitioners challenged before the SC the following issuances mentioned below on the grounds of usurping legislative authority, violating the petitioners’ right to due process and equal protection and the non-impairment clause of the 1987 Constitution as well as for being an unreasonable exercise of police power.
• DoE Circular No. DC2015-06-0010 (Providing Policies to Facilitate the Full Implementation of Retail Competition and Open Access (RCOA) in the Philippine Electric Power Industry;
• ERC Resolution No. 05 Series of 2016 (A Resolution Adopting the 2016 Rules Governing the Issuance of Licenses to Retail Electricity Suppliers (RES) and Prescribing the Requirements and Conditions Therefor);
• ERC Resolution No. 10 Series of 2016 (Adopting the Revised Rules for Contestability);
• ERC Resolution No. 11 Series of 2016 (Imposing Restrictions on the Operations of Distribution Utilities and Retail Electricity Suppliers in the Competitive Retail Electricity Market; and
• ERC Resolution No. 28 Series of 2016 (Revised Timeframe for Mandatory Contestability, Amending Resolution No. 10)
Energy Secretary Alfonso G. Cusi said the DoE is duty-bound to implement the law which seeks to uphold consumers’ freedom of choice and to promote market competition.
“The provisions in the EPIRA mandates the DoE to ensure the security, reliability and availability of transparent and reasonably-priced electricity in the country,” Cusi said.
“One of the provisions of the law is the implementation of the RCOA, which allows consumers to directly contract power supply from licensed Retail Electricity Suppliers (RES),” Cusi added.
“The spirit of the RCOA is giving the consumers the freedom of choice which would result in higher productivity for them. And the power of choice can only be maximized when there is a level playing field for all suppliers,” he said.
“It is hoped that whatever the decision the Supreme Court reaches, it will redound to the ultimate benefit of the consumers which is really the intent and the spirit of RCOA.” Cusi said.