Let big users pick suppliers, ERC asked


A big business group, two big universities and a mall owner have asked the Supreme Court (SC) to stop the Energy Regulatory Commission (ERC) from restricting the number of their suppliers of energy.

Petitioners who questioned the restriction on Wednesday were led by the Philippine Chamber of Commerce and Industry, along with Ateneo de Manila University, San Beda College-Alabang in Muntinlupa City (Metro Manila) and mall owner Riverbanks Development Corp.

The SC is still on holiday recess and will resume session in January 2017.

The complainants, in a 126-page petition for certiorari, decried before the SC the implementation of new regulations that mandate power consumers with a monthly average peak demand of 1 Megawatt (MW) to abandon their current power supply contracts and enter into new deals with any of the 23 suppliers chosen by the ERC to supply the contestable market.

They also asked the High Court to block the Department of Energy (DOE) and the ERC from implementing their resolutions imposing mandatory contestability to electricity consumers, saying it limits their choice of suppliers by prohibiting distribution utilities from participating in the contestable market even if the distribution utilities can offer the lowest price to consumers.

“The new regulations issued by the DOE and the ERC violate the Epira Law and the Constitution,” according to Jon Anton Daryl Chua, a legal counsel for the petitioners.

“Instead of fulfilling the law’s mandate of promoting greater end-user choice through free and fair competition, the new regulations created a virtual cartel and compelled the petitioners to negotiate on an unequal footing with the suppliers chosen by the ERC, under an arbitrary deadline and a threat of severe sanctions. Under the law, the DOE and the ERC should regulate the power industry instead of coercing and threatening consumers,” it was pointed out.

The petitioners assailed the February 26, 2017 deadline imposed on the big power consumers to enter into new power supply contracts or be slapped with the penalty of disconnection or the payment of a hefty premium on their contract price or the Wholesale Electricity Spot Market (WESM) price, whichever is higher.

Among those named respondents were DOE Secretary Alfonso Cusi, ERC Chairman Jose Vicente Salazar and incumbent ERC Comissioners Alfredo Non, Gloria Victoria Yap-Taruc, Josefina Patricia Asirit and Geronimo Santa Ana.

Salazar’s name was dragged in the controversy after a suicide note of ERC Director Jun Villa claimed corruption in the commission.

In particular, the petitioners sought to void the ERC resolutions and circulars authored by Salazar and other commissioners that seek to deprive electricity consumers of their basic constitutional right to freedom of choice.
The resolutions and circulars

• DOE Circular No. DC2015-06-0010 titled “Providing Policies to Facilitate the Full Implementation of Retail Competition and Open Access in the Philippine Electric Power Industry”;

• ERC Resolution No. 5, Series of 2016 titled “A Resolution Adopting the 2016 Rules Governing the Issuance of Licenses to Retail Electricity Suppliers (RES) and Prescribing the Requirements and Conditions Thereof”;

• ERC Resolution No. 10, Series of 2016 titled “A Resolution Adopting the Revised Rules for Contestability”; and

• ERC Resolution No. 11, Series of 2016 titled “A Resolution Imposing Restrictions on the Operations of Distribution Utilities and Retail Electricity Suppliers in the Competitive Retail Electricity Market.”


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1 Comment

  1. There is less arbitrariness in the regulation of the energy sectors because the parties affected are more knowledgeable, organized and capable of resisting arbitrariness in this sector. However, not every sector in the Philippines is blessed with this circumstance. Hence, those of us who live here have to make the most from the least ideal situation.