ERC amending RES licensing guidelines
The Energy Regulatory Commission (ERC) approved on 24 May 2010 the posting of the proposed amendments to the Guidelines for the Issuance of Licenses to Retail Electricity Suppliers (RES) on the ERC-administered websites, namely: www.erc.gov.ph and www.buyyourelectricity.com.ph, to seek comments from the public. The comments must be submitted by 25 June 2010 and in electronic and hard copies. The soft copy must be sent to the email address contestable@erc.gov.ph while the hard copy must be brought to the Docket Section of the ERC located at the 18th Floor, Pacific Center Bldg., San Miguel Avenue, Ortigas Center, Pasig City. A RES license is the authority granted to a person or entity to sell, broker, market or aggregate electricity to the end-users of a contestable market in a retail competition and open access (RCOA) regime. An applicant for a RES license must, among others, demonstrate its technical and financial capabilities, including creditworthiness. The license is valid for three (3) years.
The Guidelines were promulgated on 13 July 2005 and were amended on 01 February 2006 to include the technical requirements for customer switching or the B2B (business-to-business) system. The proposed amendments are part of the fine-tuning preparations for the dawning RCOA. A contestable market will soon exist wherein qualified electricity consumers can choose among the competitive generation rates offered by the various RES. This is known as retail competition. The power supply can be accessed from the chosen supplier by the contestable market customer through the transmission network of the National Grid Corporation of the Philippines (NGCP) and the distribution facilities of DUs (distribution utilities) for fees known as wheeling charges. This is known as open access.
The proposed amendments to the RES Guidelines include, among others: (1) renaming of the RES license from the present “Supplier’s License” to “RES License”. The latter term has been used in other rules succeeding the RES Guidelines and are now widely but informally used by the industry players. The new term will also distinguish retail suppliers from wholesale suppliers; (2) addition of the National Grid Corporation of the Philippines (NGCP, the successor of TRANSCO in a concession granted in December 2008 by virtue of R.A. 9511) in the definition of terms; (3) adoption to the Guidelines of Section 7 of R.A. 9511 (An Act Granting the NGCP a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines), the provision that defines the limitations in owning NGCP shares of stock to prevent market abuse; (4) additional considerations in computing the license fee; and (5) a provision requiring a DU to notify the ERC within 15 days of its intention to operate as a RES in its franchise area. A public consultation will be scheduled by the ERC if there are contentious issues that need to be discussed.
“The ERC urges all industry participants to get very involved and submit their comments to help make the Guidelines more effective and help ensure a smooth transition to the contestable market in a retail competition and open access regime,” Chairperson Zenaida G. Cruz-Ducut of the ERC appealed.
May 31, 2010