PRESS RELEASE:ERC amends Rules for Issuance of License to Retail Electricity Suppliers
The Energy Regulatory Commission (ERC), on 17 February 2011, issued Resolution No. 1, series of 2011 which adopted the amendments to the Revised Rules for the Issuance of Licenses to Retail Electricity Supplier’s (RES). The amendments to the rules resulted from the consideration of comments solicited from industry stakeholders and the general public. The Revised Rules prescribes the qualifications and criteria for licensing suppliers of retail electricity which includes, among others, a demonstration of their technical and financial capabilities and creditworthiness. A RES can start selling electricity only once the regime of open access and retail competition takes place.
The Revised Rules aim to ensure consumer protection and enhance competition in the retail electricity market. The key amendments include the following: (a) the term of RES License is changed to five (5) years; (b) the basis in the computation of the RES License Fee include the capitalization or the total capital invested into the business; or in the event an applicant has two or more businesses, the capitalization allocated for the supply business; or two or more business which are electricity related, the capitalization shall be based on the ERC-approved BSUP (Business Separation Unbundling Plan); (c) a mandated 30-day notification to the ERC by a DU if it intends to operate as a Local RES; (d) proof of financial capability if RES applicant is new and an affiliate of another company.
The draft amendments to the Guidelines for the Issuance of Licenses to RES was posted on www.erc.gov.ph for solicitation of comments for a period of thirty (30) days and the second draft for a length of ten (10) days. Major industry stakeholders provided their inputs and concerns and which were considered by the ERC towards this final version. The amended rules will become effective fifteen (15) days after publication in a newspaper of general circulation.
“The ERC is ensuring that the rules required for a fair and competitive retail electricity market are in place so that a smooth transition to a regime of open access and retail competition happens,” ERC Chairperson Zenaida G. Cruz-Ducut stressed.