Consumers given ‘choice’ as ERC resumes RES licensing

By Myrna M. Velasco – January 27, 2020, 10:00 PM
from Manila Bulletin

More Filipino consumers can already exercise their “power of choice” under the Retail Competition and Open Access (RCOA) policy, as the Energy Regulatory Commission (ERC) has resumed acting on applications for retail electricity supplier (RES) licenses.

ERC Director and Spokesperson Floresinda B. Digal said the regulatory body has re-started processing both new and renewal of RES licenses, as legal remedy had already been sorted out on this matter – primarily in the renewal of RES licenses that already expired.

Digal explained that ERC invoked a 2011 Resolution on RES licensing that had not been affected by the 2017 Supreme Court’s temporary restraining order (TRO), a ruling that basically stopped the implementation of the revised ERC rules on RCOA that were promulgated in 2016.

Hence, with the 2011 rules on ERC licensing not covered by the TRO of the high court, it was noted that the regulatory body was able to legally lean on that for the resumption of issuing new RES licenses, so “power of choice” can be offered to larger base of qualified and interested consumers in the Luzon and Visayas grids.

The RCOA, or the policy that allows consumers to choose their own electricity suppliers on their cost preference, is one of the policy reforms enshrined under the Electric Power Industry Reform Act (EPIRA) as one way to make electricity more affordable in the country.

Retail power customers vouch on the “cheaper electricity rates” they have been sourcing from power suppliers – dropping to the level of ₱3.00 to ₱3.50 per kilowatt-hour (kwh) compared to the rate being passed on to captive customers or those without a choice yet at ₱5.00 to ₱6.00 per kWh on average.

With the legal impediments thrown against the policy, the country’s power retail market currently operates on a “voluntary basis” – for contestable customers within the prescribed consumption thresholds of 1.0 megawatt to 750 kilowatts.

The long-term goal is to bring down power retailing up to the level of households so they can also make a choice on who shall be supplying their electricity – but this is seen happening so many years from now yet.

Last year, the ERC confirmed the expiration of RES licenses of some industry players in that segment – primarily those held by the Ayala and Aboitiz groups. And with the resumption of RES licenses’ processing, it is expected that these power retailers can flourish again on their offer of power supply under the competitive purview of the restructured power sector.

Beyond the players with expired licenses, interested entrant-suppliers in the retail market could also join now with the ERC’s re-instituted policy on processing of new RES license applications that will be filed before it.