This is an article repost.
MANILA, Philippines — The Energy Regulatory Commission (ERC) has laid down the transitory rules that shall govern industry participants and customers in the envisioned competitive retail electricity market (CREM) as underpinned by the much-awaited open access regime.
The rules – addressing concerns ranging from customer-switching to the supplier of last resort (SOLR) – were subjected to public consultation last July 7. The industry inputs will guide the industry regulator in crafting the final set of rules for open access.
In the draft rules, the ERC reiterated that for assuming its role as central registry administrator (CRA), it shall also “administer the customer switching process in the transition phase of retail competition.”
Qualified in the contestable customer bracket are end-users with monthly average peak demand of at least one megawatt for the preceding 12 months prior to December 26, 2011, which has been the declared kick-off date for open access.
“For the duration of these transitory rules, the ERC shall assume the responsibility of the Central Registry Administrator for the CREM while the establishment of an automated business-to-business (B2B) system is in process,” the rules stipulated. The transitory rules will be in effect for one year from its promulgation.
Contestable customers, or those qualified to choose their electricity suppliers under open access, may cancel or terminate their retail supply contract (RSC) with their retail electricity supplier (RES) or local RES and switch to another power provider, as long as they would comply with the rules prescribed by the regulator.
The policy set by the ERC provides for a cooling-off period, in case of RSC cancellation to be initiated by a contestable customer with its RES or local RES. RES are power suppliers licensed by the ERC; while local RES are the distribution utilities intending to supply the needs of contestable customers within their franchise areas, provided that they have already undertaken business separation and unbundling of their segments of operations.
On the change of power suppliers, a switch request may be lodged with the CRA; and this may be approved or rejected depending on the evaluation of justifications or reasons provided by the RES or the local RES.
For the termination of a supply contract, a drop notice shall be sent by the CRA or the ERC to the RES or local RES stating intent “to terminate the service being provided to a contestable customer effective on a given date.”
Meanwhile, the DUs are to be designated as SOLR in their franchise areas, but they will only exercise such function with prior authorization from the industry regulator. “No DU shall operate as a supplier of last resort in the CREM until it has been duly notified to act as such by the ERC,” the rules prescribed.
And if the distribution firms would refuse assuming SOLR function, the regulatory body indicated that specific reasons must be provided “for its incapacity to serve as SOLR.”
For directly-connected customers, the rules prescribed that their SOLR “shall be designated through a competitive bidding process to be conducted by the ERC;” and that the qualified potential SOLR shall be a licensed RES or local retail electricity supplier.
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By: Myrna Velasco
Source: Manila Bulletin, July 18, 2011
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