ERC approves PSOP Rules
The Energy Regulatory Commission (ERC) approved on 25 January 2010 the Rules for the Power Supply Option Program (PSOP) to provide the regulatory framework to ensure the effective implementation of the PSOP and to provide an additional choice of supply to qualified customers. The PSOP is the latest addition to the existing supply programs such as the Customer Choice Program of MERALCO and the One Day Power Sale (ODPS) of the NPC. It will be available to Luzon grid electricity consumers with a monthly average peak demand of 1 MW for the past 12 months preceding the implementation of the said program.
The Rules stemmed from the petition filed in 2008 for an Interim Open Access (IOA) program by several industry players seeking an early implementation of open access in the Luzon and Visayas grids towards the lowering of electricity rates. A series of public hearings on the petition was conducted. On 10 November 2008, the ERC issued a Decision granting the petition with modifications. The Decision noted the tight supply situation in the Visayas grid, so the PSOP was made available only to Luzon grid customers.
A notable major modification was the renaming of the scheme from IOA to PSOP. This was done to avoid confusion once the actual Retail Competition and Open Access (RCOA) regime commences. Unlike RCOA, participation in the PSOP is voluntary. All contracts and transactions made under the PSOP will be automatically terminated upon the commencement of RCOA.
The PSOP is designed to be initially implemented 90 days after the completion of either: (1) the transfer of the operation of the Calaca NPC generation assets to the private generation companies concerned or its equivalent in terms of capacity; or (2) the privatization of a least 70% of the total capacity of generating assets of the NPC in Luzon and Visayas, whichever comes first. Given that the Calaca NPC generation assets were privatized on 03 December 2009, the commencement will be on 04 March 2010.
It must be noted that under the Rules, the ERC is tasked to do pre-operating functions such as the issuance of certifications for eligible PSOP customers. Such certifications shall be coursed through participating distribution utilities (DUs), who must send such to the eligible customers within five (5) days from receipt of notice from the ERC.
Finally, there remain the issues of accounting, settlement of energy imbalances and line rentals. The settlement of these issues will require a separate set of Rules that will be based on a scheme that must be formulated by the Philippine Electricity Market Corporation and the original petitioners to the IOA.
“The PSOP is a voluntary scheme which gives some high load electricity consumers in Luzon the power to choose their own energy supplier. Such power to choose engenders competition among the eligible suppliers, which translates to more affordable rates and better service for the consumers,” ERC Zenaida G. Cruz-Ducut explained.
February 12, 2010