Posted on March 24, 2017

THE Energy Regulatory Commission (ERC) might be forced to review the deadlines it set for big power consumers to secure a supply contract with retail electricity suppliers after a court blocked the mandatory provisions for the industry’s envisioned greater retail competition and open access (RCOA).

The temporary restraining order and injunction against the RCOA provisions, which were sought by distribution utility Manila Electric Co. (Meralco) and granted by a lower court, have been lifted after the Supreme Court on Friday prohibited the legal proceedings to continue. Meralco said it was exploring legal remedies.

“The uncertainty is not helpful to the market, especially the customers,” an official of a newly licensed retail electricity supplier (RES) said. “If you’re a customer, ERC is saying you have to sign contracts by October — that’s the deadline by this month — for your contracts to be effective Dec. 26, 2016.”

ERC is said to be reviewing the timeline set for RCOA and is leaning towards extending the deadline set for consumers to negotiate new supply contracts with electricity retailers. A review of the timeline was part of the subject of a press release issued by the ERC on Friday, which was recalled after it was sent to media in response to the high tribunal’s ruling.

“If you’re a customer now, do you negotiate, do you sign up, will suppliers really wait for you forever?,” the RES official said.

Under Department of Energy (DoE) circular DC2015-06-0010, electricity end-users with a monthly average peak demand of at least 1 megawatt (MW) for the preceding 12 months will become part of the “contestable market” when RCOA takes effect.

Two years afterwards, the threshold level for the contestable market will be reduced to 750 kilowatts (kW). The ERC is required to evaluate the performance of the electricity market and gradually reduce the threshold level until it reaches household demand level.

ERC Resolution No. 10, Series of 2016, adopted the revised rules for contestability, which also mandated consumers with an average peak demand of at least 1 MW to enter into a retail supply contract with a RES 60 days before Dec. 26, 2016.

However, the lower court’s move to temporarily block the mandatory provision left customers unsure of how to proceed. The Supreme Court’s ruling thus left customers with little time to negotiate a supply contract. — Victor V. Saulon