ERC consults public on Guidelines for the Issuance of Licenses for Retail Electricity Suppliers

The Energy Regulatory Commission (ERC) held a public consultation on 8 March 2005 on the proposed Guidelines for the Issuance of License to Retail Electricity Suppliers (RES). This is the first of the series of Guidelines that the ERC will promulgate in order to govern the effective implementation of retail competition.

The proposed Guidelines prescribe the qualifications, criteria, and requirements prior to the issuance of license to RES, and likewise sets the obligations of the RES as a key player in the retail electricity supply business. “This set of Guidelines signals the dawning of Retail Competition, the end-stage of the electricity reform that began four years ago”, ERC Chairman Rodolfo B. Albano, Jr. stated.

The EPIRA provides that retail competition and open access on distribution wires shall be implemented after the five conditions are met, namely; unbundling of the transmission and distribution wheeling charges, initial implementation of the cross subsidy removal, establishment of the WESM, privatization of at least 70% of Napocor’s total generating capacity assets in Luzon and Visayas, and transfer to Independent Power Producer (IPP) Administrators the management of NPC-IPP contracts.

Except for the privatization of Napocor’s assets and the transfer of management contract, all other precedent conditions have been met with the first two being undertaken by the ERC. Based on the reports and projections of the concerned agencies and the industry players, the ERC issued a Resolution on 21 September 2004 setting the tentative date for the commencement of retail open access for qualified contestable customers of private distribution utilities in Luzon on 01 July 2006.

The EPIRA mandates ERC to level the playing field of competition for service providers and at the same time, advance consumer interests. “We need to encourage the entry of new players in the retail electricity supply business in order to realize this specific thrust of the EPIRA”, Chairman Albano said.

March 10, 2005