16 JULY 2012
6-Month Open Access Transition Proposed
Prospective participants in the open access and retail competition (OARC) regime in the restructured electricity sector are provided at least 6-month transition to secure their respective certifications and negotiate for supply contracts with their preferred power providers.
Distribution utilities (DUs) like the Manila Electric Company (Meralco) are throwing support to the proposed timeframe, so long as the rules are issued prior to the prescribed transition phase.
Qualified participants under open access are aptly called “contestable customers” (CCs) because these are the end-users which shall be afforded the “power of choice” on their electricity suppliers. The initial threshold will be those in the 1.0 megawatt peak demand bracket.
“We agree with the 6-month timeframe to certify CCs,” Meralco has stated in a document submitted to the technical working group (TWG) formulating the rules for the power industry’s open access regime.
It added that the time allowance “will allow sufficient time for CCs to negotiate supply contracts that will provide them the best value and for DUs to prepare assuming that the rules are issued prior to the 6-month timeframe.”
Nevertheless, industry players are seeking clarification with the Department of Energy-led TWG as to “the validity of the certifications issued by the ERC (Energy Regulatory Commission) in 2011 to potentially contestable customers consuming an average of at least 1.5MW.”
It must be recalled that more than 500 prospective open access participants have sought certifications from the ERC last year. That was prior to the declaration that the policy’s implementation had to be stalled for one year due to remaining concerns that must be addressed.
At this time, absent yet an official pronouncement from the DoE if the October 26,2012 timeline is still achievable, the entire industry is guessing if there would be further delays in opening up the market to competition. Their best bet is actually December this year, but if that is not feasible, they are eyeing that everything will skid to next year.
Relative to the proposed transition phase to a competitive set-up, proposals were also raised that contestable customers must at least enter into a minimum one-year contract with their targeted suppliers.
But Meralco opined that since “supply of energy is subject to negotiations…the term of supply contracts need not be mandated.”
It stressed though that “if the objective is to promote stability during the initial implementation, then this may be supported by a comprehensive and complete set of rules as well as the completion of a ‘walk-through’ exercise by the industry.”
Read article source in Manila Bulletin