Power retailers seek continued operations amid ERC vacuum
Retail electricity suppliers (RES) are asking the Department of Energy (DOE) to allow them to operate despite pending and expired licenses due to the lack of quorum at the Energy Regulatory Commission (ERC).
In a letter to Energy Secretary Alfonso Cusi, the Retail Electricity Suppliers Association of the Philippines Inc. (RESA) said they should be allowed to operate under the retail competition and open access (RCOA) regime even with pending or expired licenses.
The group cited that the DOE and the Philippine Electricity Market Corp. (PEMC) agreed to allow power generation companies with expired or pending certificates of com- pliance (COCs) to operate and trade in the Wholesale Electricity Spot Market (WESM).
“Our sector would need a parallel issuance to ensure continued service to contestable customers (CCs) currently contracted with a RES or local RES,” RESA said.
Under the RCOA regime, qualified end-users in the Luzon and Visayas grids make up 33.86 percent of the system peak based on ERC data as of October 2017.
But of those qualified, only 44.42 percent – or 917 CCs – of the contestable market, with a demand of 2,326.49 megawatts (MW) are contracted with RES.
Currently, there are 30 published RES but seven of them have expired licenses with pending applications that have yet to be acted upon by the ERC.
There are also entities that have filed applications with the ERC for the issuance of RES license, RESA said.
“We note the previous circulars your office has issued to ensure the continued operation of the supply sector, however, with the current legal issues affecting the operation of the ERC, we wish to seek your support for a measure that will provide a similar solution to the supply sector,” the group told Cusi
Last month, the DOE and PEMC, WESM’s current operator, made the decision to allow generation companies to operate and trade in the spot market to ensure there will be no disruption in the country’s power supply as a result of the delay in the processing of applications before ERC, including COC applications, after the suspension of its four commissioners.
Cusi had said about 26 generation companies with a total of 3,314.6 MW generator capacities have expired or have expiring COCs this year.
Under the DOE-PEMC resolution, power generation companies with expired COCs can continue trading upon proof of submission of their application for the renewal of their COC with ERC.
The COC is a requirement for the registration and continuing participation of gener- ation companies in the WESM.
Cusi had also directed PEMC and the DOE to work closely with the ERC to ensure the continuing operations of existing plants and to allow power generation from new plants that will be completed.
Last December, the Office of the Ombudsman ordered the suspension of ERC commissioners Alfredo Non, Gloria Yap-Taruc, Josefina Patricia Magpale-Asirit and Geronimo Sta. Ana for one year without pay for delaying the conduct of competitive bidding in securing power supply agreements (PSAs).
The competitive selection process (CSP) policy – which requires DUs and ECs to undertake competitive bidding to secure PSAs with generation companies—was supposed to start in Nov. 7, 2015 but implementation was moved to April 30, 2016 to give power players a transition period to comply.
The Ombusdman said the delay in implementation negated the policies contained under the Electric Power Industry Reform Act of 2001 (EPIRA) and CSP resolutions to protect the interests of consumers.