ERC wants ‘regulation schism’ with PEZA resolved prior to RCOA
It is the wish of the Energy Regulatory Commission (ERC) that the seeming ‘split in regulatory powers’ vested upon special economic zones be resolved prior to the full mandate of retail competition and open access (RCOA) in the restructured electricity sector.
In an interview, ERC Commissioner Alfredo J. Non told Business Bulletin that the resolution of the dispute is no longer within their control but with the courts because of a pending case. Yet he opined that this is a crucial matter that must be harmonized in the regulatory chain before the kick-off of mandatory retail competition in the power industry.
The schism in ‘power service regulation’ of areas under the jurisdiction of the Philippine Economic Zone Authority (PEZA) had been due to a typographical error in the Electric Power Industry Reform Act (EPIRA) – specifically in reference to a repealing clause that should have nullified PEZA’s electric franchising and regulatory powers.
Under Section 80 of the EPIRA, it repeals Section 11(c) of the PEZA Law, but there is no such provision in that particular act. Instead, the EPIRA should have repealed Section 12 (c).
The case is now pending at a Pasig regional trial court – and the ERC is a party to it. The Manila Electric Company and the Philippine Electric Plant Owners Association Inc. (PEPOA) had so far obtained an injunction against PEZA’s implementation of certain guidelines, primarily that of empowering it to regulate electric service within ecozones.
It was gathered that a ‘settlement’ had already been reached with PEZA, but the final resolution of the case shall still rest on two options: one, the Supreme Court shall rule on the correct interpretation of the typographical error in the EPIRA; or two, Congress would amend EPIRA to rectify that particular typo error in the law.
In the draft of RCOA Rules, ‘preferential arrangements’ are being pushed for special freeport zones and the PEZA locators so they could also be served competitively under the retail realm of the power industry.
Non has noted that there would be specific category of retail electricity supplier (RES) license that can be applied by those intending to serve the contestable customers of PEZA under the industry’s RCOA regime. PEZA itself though can act as ‘power service aggregator’ for its locators.
The ERC official added that the financial requirement for PEZA zones will likely be set lower if compared to the requirements set for other RES licensees.
“For PEZA before, we have difficulty fitting them into the very stringent requirements of RES…so they should be classified separately. And if PEZA would decide to be aggregator for its locators, their financial requirement shall be set lower,” Non stressed.
Full mandatory contestability for consumers who would finally be given ‘freedom of choice’ in their electricity suppliers is set June, 2016 at a reduced threshold of 750 kilowatts.