DoE may step in as licensing body for retail power suppliers

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THE Department of Energy (DoE) is studying the legality of becoming the issuer of licenses for retail electricity suppliers, a function currently taken up by the Energy Regulatory Commission (ERC) but put on hold by a court order on rules governing retail competition and open access (RCOA).

“The Secretary (Alfonso G. Cusi) ordered us to look into it because we can no longer wait for other agencies to act on these things,” Energy Undersecretary Felix William B. Fuentebella told reporters.

“At the end of the day, the DoE will always push forward with its power of choice campaign. So no agency nor company can further delay this order of the secretary,” he said.

“We have to act. So that’s the direction,” he added.

Mr. Fuentebella said the DoE was looking at a policy that would allow it to be the party to handle the licensing.

“We’re looking at the entire situation right now,” he added, referring to the stalled regulations after the issuance of a temporary restraining order (TRO) by the Supreme Court on Feb. 21, 2017.

RCOA was meant to give retail electricity suppliers (RES) access to the power distribution network as they serve electricity users whose consumption has grown to reach the threshold set by the ERC. These big “contestable” power users are mandated to buy their electricity from a licensed RES, moving them out of the captive market of a distribution utility.

Some sectors, including educational institutions, questioned the mandatory provision of the RCOA rules before the Supreme Court. The TRO came out at time when the threshold was about to be lowered to 750 kilowatts (kW).

The ERC has opted to wait for the high court’s decision on the issue. But the DoE opted to issue new rules that dropped the questioned provisions of RCOA, specifically its “mandatory” aspect. In the meantime, several RES licenses have expired or about to expire, resulting in uncertainty in the supply for those who previously contracted with the retail suppliers.

Thus far, only those consuming a monthly average of 1 megawatt (MW) remain contestable customers, leaving the retail electricity suppliers to compete for a slice of a limited market.

Mr. Fuentebella said the policy that would spell out the DoE’s function as issuer of RES licenses might be included in the upcoming rules on the Green Energy Option (GEO), a scheme that allows customers the option to be supplied only with renewable energy sources.

Unlike the RCOA rules, GEO will cover consumers with an electricity usage as low as 100 kW, which he described as those with two- to three-storey buildings. — Victor V. Saulon