The Department of Energy (DOE) has issued a circular that spells out the timelines for compliance for the full implementation of the Retail Competition and Open Access (RCOA) in the country’s power sector.
Under the RCOA regime, bulk electricity consumers with an average demand of 1 megawatt (MW) will be converted from being a “captive” customer of distribution utilities (DUs), such as the Manila Electric Co. (Meralco), to “contestable” customers.
These contestable customers would have the liberty to choose from among the registered members of the Wholesale Electricity Spot Market (WESM) to choose a power supplier other than Meralco.
Department Circular (DC) 2016-04-0004, signed on April 26 by Energy Secretary Zenaida Y. Monsada, states that compliance to full contestability by contestable customers with an average demand of 1 MW and above shall be no later than December 26 this year.
The DC was posted in the DOE web site on May 10.
Two years after the initial implementation, the threshold would be reduced to 750 kilowatts (kW). Thereafter, the Energy Regulatory Commission (ERC) shall evaluate the performance of the market, which outcome shall be the basis of the reduction of the threshold level until it reaches the household level.
Meanwhile, compliance to full contestability by contestable customers with an average demand ranging below 1 MW to 750 kW shall be voluntary effective on June 26 and mandatory effective on June 26 this year. Similarly, pursuant to Electric Power Industry Reform Act, the implementation of Section 2 of the DC 2015-06-0010 is amended to June 26, 2017 thereby allowing retail aggregation.
“The DOE takes cognizance of the challenges raised by the Energy Regulatory Commission in adhering to the timelines set forth under DC 2015-06-0010, particularly on the simultaneous implementation of mandatory contestability of 750 kW end-users and demand aggregation,” the DOE said.
The ERC is overseeing an industry with 140 DUs, 17 retail electricity suppliers, 24 local retail suppliers, 637 independent power producers.