May 282013

MANILA, Philippines – The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) will allow power consumers more time to enter into a retail supply contract as part of the open access regime.

Under a draft resolution issued by the ERC, contestable customers who have not yet signed a contract with a supplier shall continue to be served by their franchised distribution utilities until they are able to negotiate a more competitive retail supply contract.

“The intent is to ease pressure on the contestable customers in securing a retail supply contract and to avoid being disconnected from service or be served by a supplier of last resort which have higher rates,” the DOE said.

The DOE said the ERC resolution is intended to address the growing concerns of many contestable customers of possible disconnection due to the inability to sign a retail supply contract with a supplier.

The so-called retail competition and open access (RCOA) will make power distribution companies more competitive.

Both the DOE and ERC are looking into how RCOA will better operate to achieve the intent of the Electric Power Industry Reform Act (EPIRA) in terms of promoting customer choice, better services and competition in the power supply sector.

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Under the so-called open acccess regime, large power users will be able to choose their own suppliers, in contrast with the current system where they are limited to the supplier that has jurisdiction over their areas.

Mandated under the EPIRA, the open access regime is expected to spur competition among players.

Industry players expressed optimism the new environment would be good for the sector.

 AboitizPower, for one, expressed optimism that the company is well prepared for it.

 At the same time, AboitizPower president and chief executive officer Erramon Aboitiz expressed hopes that contestable customers would be willing to sign long-term contracts with suppliers to make it easier for generation companies to build additional capacity.

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