Turmoil at ERC delays open access scheme – group

A transparency group on Monday said that the ongoing controversy at the Energy Regulatory Commission (ERC) is delaying the full implementation of retail competition and open access (RCOA) in the electric power industry.

“Who benefits from this turmoil? I am sure it is not the consumer because every time RCOA is delayed, they end up paying the price,” said Jake Silo, spokesperson for the Action for Consumerism and Transparency in Nation Building (ACTION), a non-government consumer advocate.

President Rodrigo Duterte recently called on commissioners of the ERC to resign, following the alleged suicide of Bids and Awards Committee Chairman Atty. Francisco “Jun” Villa Jr.

Silo said before the controversy erupted, the industry had already gained momentum on RCOA, which suffered years of delay until the current ERC leadership set it in motion earlier this year, after 15 years in the making.

Last May, the ERC promulgated a definite timeline for mandatory contestability and new safeguards against collusion. There was an attempt to derail these twin moves, but the Supreme Court temporarily set aside an injunction issued by the Pasig regional trial court, citing the grave and irreparable injury it posed on the energy industry, the Philippine economy and electricity end-users.

Issued in October, the high court order paved the way for implementation of mandatory contestability by February next year. If it had not been challenged, mandatory contestability would have been implementable by December 26.

Under RCOA, customers with monthly average peak demand of at least 1 megawatt, dubbed as contestable customers (CCs) by the ERC, can choose the supplier of their energy requirement.

These suppliers, commonly known as RES, will directly negotiate and contract on a wholesale level with power-generation companies so they can sell electricity to contestable customers at competitive rates.

This is currently being implemented on a voluntary basis at a threshold of 750 kilowatts, largely among industrial consumers such as firms located in export processing zones. The February 2017 timeline for mandatory contestability kick starts a process that will gradually free more consumers from the captive market, until the power to choose reaches the household level.

“But now everything is up in the air all over again because the talk has shifted to abolishing the regulator,” Silo said.

“Before our lawmakers jump on the ‘Abolish ERC’ bandwagon, they might do well to consider this: In a multibillion-peso industry, why is the world turning on the anxieties of one person over a 490,000-peso contract that wasn’t even awarded? What is the net effect of abolishing the ERC or even contemplating on it at this critical juncture? These are the questions begging for answers.”

ACTION also calls on lawmakers to ensure the full implementation of RCOA, which culminates wide-ranging reforms started 15 years ago with the enactment of the Electric Power Industry Reform Act of 2001 or the EPIRA law.

“If our government and lawmakers are serious about their pledge to free consumers from the burden of high electricity costs, then it is incumbent on them to consider very carefully the ramifications of disrupting energy sector reforms at this critical juncture. The Filipino people deserve no less,” Silo stressed.