Retail competition should benefit consumers: DOE

MANILA -- The Department of Energy (DOE) seeks to establish an industry where power retailers and consumers should be able to compete fairly under the retail competition and open access (RCOA) system.

“We have to properly explain to the industry players our way forward in implementing the ‘power of choice’ provisions of the EPIRA and one of them is the provision on retail competition and open access,” DOE Secretary Alfonso Cusi told  a recent public consultation meeting on the RCOA policy at the Park Inn, Radisson Clark in Pampanga.

Some 130 representatives from contestable customers, retail electricity suppliers and distribution utilities (DUs) attended the meeting.

“The demand-side contestable customers and the supply-side retail electricity suppliers must be guided towards a competitive and transparent system under a fair playing field,” Cusi said.

The DOE presented at the meeting two RCOA circulars to guide both the demand-side contestable consumers and the supply-side retail electricity suppliers towards a competitive and transparent system under a fair playing field.

The RCOA policy on the demand side requires contestable customers with an average demand peak of 500kilowatts (kW) and above to voluntarily participate in the retail market.

It also allows electricity end-users within a contiguous area whose aggregate average peak demand is not less than 500kW to voluntarily enter into a retail supply contract as aggregators who may purchase and resell electricity on a group basis.

The Energy Regulatory Commission (ERC) will promulgate the supporting guidelines in the licensing of the retail electricity suppliers and retail aggregation and provide for the responsibilities of the distribution utilities and the Philippine Electricity Market Corp.

The RCOA policy for retail electricity suppliers is for the generation company or its affiliate, an affiliate of a distribution utility, retail aggregators, independent power producer administrators, prospective generation companies and other persons authorized by the ERC to engage in the supply business to the contestable customer to have a license.

The policy also emphasizes the need for licensed retail electricity suppliers engaged in the generation and distribution sectors to unbundle their supply business in order to ensure a level playing field.

It likewise provides that distribution utilities may provide electricity services to contestable customers within its franchise area upon authorization from the ERC and compliance with the unbundling provisions of the Electric Power Industry Reform Act and its implementing rules and regulations.

Cusi reminded the participants that the DOE and the ERC must annually review and issue RCOA policies until it reaches the household level.

“The DOE assures the public of its commitment in moving forward with RCOA for the benefit of the consumers,” Cusi added.(PNA)