DoE’s Cusi signs order modifying retail supply rules

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Energy Secretary Alfonso G. Cusi -- PHILSTAR

ENERGY Secretary Alfonso G. Cusi signed on Wednesday a circular that allows big energy users to source their power voluntarily from a licensed retail electricity supplier (RES), doing away with the mandatory provisions of the stalled retail competition and open access (RCOA) rules.

“I have signed the department circular on RCOA,” Mr. Cusi told reporters on the sidelines of a Joint Congressional Power Commission (JCPC) hearing on updates on the regulation that remains under Supreme Court temporary restraining order (TRO).

“Effectively signed and hopefully it can be published tomorrow,” he added.

As soon as the circular is published, the Department of Energy (DoE) will submit the new circular to the Supreme Court, Mr. Cusi said.

“From there we will calibrate how we will move forward, so that I will not be held in contempt,” he said.

The new circular will reverse contentious provisions of a previous DoE circular as well as resolutions from the Energy Regulatory Commission (ERC) that required contestable customers — or those whose electricity consumption for the past 12 months has reached the thresholds set by the regulator — to move away from being part of the captive market of a distribution utility.

The switch to a licensed retail electricity supplier is meant to allow greater participation from new players, thus spurring competition and lowering power costs. RCOA is called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), the law that restructured the power sector, as well as its implementing rules and regulation.

The new circular will also allow the ERC to continue issuing licenses to retail electricity suppliers, which was among the provisions placed on TRO as sought by a number of education institutions and a business group. The TRO was issued by the high court in February.

During the JCPC hearing, DoE Undersecretary Felix William B. Fuentebella said the circular would move RCOA further as the threshold will be lowered further to 500 kilowatts (kW).

At present, consumers using an average of one megawatt for the past year are still allowed to switch to an RES from a distribution utility. Those in the 750-900 kW threshold failed to do so because of the TRO.

Aside from the lower threshold, the new circular will expedite the timeline for electricity end-users within a contiguous area whose aggregate average demand is not less than 500 kW for the past year to voluntarily enter into a retail supply contract with “aggregators.” — Victor V. Saulon