ERC amends Business Separation Guidelines
The Energy Regulatory Commission (ERC), through Resolution No. 49, Series of 2006, amended the Business Separation Guidelines (BSG) that was promulgated on 22 September 2003. “The ERC deemed it proper to amend the BSG to make it attuned with the Code of Conduct for Competitive Retail Market Participants promulgated on 07 June 2006 which prescribed the operational separation of a distribution utility’s (DU) regulated and non-regulated business activities,” ERC Chairman and CEO Rodolfo B. Albano, Jr. explained.
The BSG is the set of rules mandating the business separation through structural and/or functional unbundling of the business activities of electric power industry participants necessary in the restructuring and modernization of the electric power industry.
The amendments on the BSG highlights on the: (a) Addition of a new business segment called Supply services in the Generation business in anticipation of the generating company’s provision of supply services in the contestable market; (b) Inclusion of Wholesale Aggregation as one of the activities that may be engaged in by any electric power industry participant, [making it the 5th business activity: 1st – Generation, 2nd – Transmission, 3rd – Distribution, 4th – Supply, 5th - Wholesale Aggregation, and 6th – Others]; and (c) Addition of two (2) business segments in the Distribution business namely: (1) Wholesale Aggregation services and (2) Last Resort Supply services, as the DUs may also engage in the provision of wholesale aggregation services. The said amendments to the BSG were subjected to a public consultation on 25 May 2006 to give the industry stakeholders the opportunity to comment on the said amendments and for purposes of due process.
“There is an urgency to harmonize the Rules issued by the ERC to ensure healthy competition and level playing field in the emerging restructured electricity industry. Let us all work together for the attainment of the envisioned competitive electric industry for the benefit of the consuming public and the nation as well,” Chairman Albano exhorted.
November 7, 2006