ERC adopts new licensing rules for power retailers

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THE Energy Regulatory Commission (ERC) on Thursday said it has resolved and adopted the 2016 rules governing issuance of licenses to Retail Electricity Suppliers (RES).

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The 2016 rules promote free, fair, and true competition and accountability, and prevent harmful monopoly and market power abuse of Electric Power Industry Participants, the commission said in a resolution.

The rules also aims to achieve greater operational and economic efficiency, rationalizing electricity prices and making them competitive and transparent, the ERC added.

ERC Chairman Jose Vicente Salazar told reporters on Thursday there is a clamor from the industry to have rules.

“There are already pending applications. We will definitely approve those. It is already moving,” he said.

“We were supposed to issue the rules this week, but the remaining issues are on rules on contestability and restrictions,” Salazar said.

The ERC would make the announcement once the proposed amendments to the Rules for Contestability are approved.

He said the full implementation of the Retail Competition and Open Access (RCOA) has been moved to December 26, 2016 from June 26.

The proposed amendments are on the timeline for the mandatory contestability and the lowering of the threshold to 750 kilowatts (kW).

“We said mandatory by June, but it seems that because of the delay in finalization of the rules, definitely 1000kW will still be voluntary until December 26, 2016. And the 750kW, instead of December 26, we moved to June 2017. . . That’s mandatory. And then 500kW, two years from June, which means 2019,” Salazar noted.

Under the RCOA, customers with monthly average peak demand of at least 1 megawatt (MW) – classified as contestable customers (CCs) by the ERC – can now choose their own supplier.

The electricity retailers will directly negotiate with power-generation companies so they can sell to contestable customers at competitive rates.

The Electric Power Industry Reform Act (Epira) of 2001 mandates that the threshold level for the contestable market shall be reduced to 750kW.

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