ERC to implement RCOA by June 2016

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THE Energy Regulatory Commission (ERC) on Tuesday said it could beat the deadline set for the full implementation of Retail Competition and Open Access (RCOA) this year.

ERC Commissioner Jose Vicente Salazar said they would make the announcement once the proposed amendments to the Rules for Contestability are approved.

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

Salazar said full implementation of RCOA is set on June 26, 2016.


“It’s moving very fast. Our belief is that we will be able to comply with the timetable. We know that June 2016, the 1 MW is already mandatory, we have to finish this before that time,” said Salazar.

Based on the ERC timetable, Salazar said, the 750-kw threshold will be mandatory by December of next year.

The ERC’s move to amend the rules is in line with a directive of the Department of Energy (DOE) to establish policies to facilitate the full implementation of RCOA, which officially began on June 26, 2013.

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 the supplier of their energy requirement.

Retail Electricity Suppliers (RES) will directly negotiate on a wholesale basis with power-generation companies so they can sell electricity to contestable customers at competitive rates.

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

To comply with the Epira, the ERC annually evaluates the performance of the market and gradually reduce the threshold level until it reaches the household-demand level.

The participation in this mechanism, however, is voluntary because contestable customers could still choose whether to enter into retail service contracts (RSCs) or continue sourcing from their current power distributors.

The DOE issued Department Circular 2015-06-0010 stating that all CCs, currently being served by their franchised DUs, are mandated to secure their respective RSCs no later than June 25, 2016.

The order also applies to all CCs, with an average demand ranging from 750 kWh and 999 kWh for the proceeding 12-month period.

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