The start of consumer choice over local utility
Author: Darvin Tocmo Date Posted:4 November 2016
After the Supreme Court’s favour to utilities, the Philippines medium-scale electricity consumers have now the ability to choose between retail electricity suppliers other than the local utility. Energy secretary , Alfonso Cusi said “the Retail Competition and Open Access (RCOA) policies, which seek to open up the power market by giving consumers the freedom of choice, has until now been held back by some utilities.” However, the Philippines Supreme Court has issued a Temporary Restraining Order to allow full implementation of the RCOA, halting the attempts of the major utility Manila Electric Company (Meralco) to stifle the reforms. Meralco had filed via a petition against the Department of Energy (DOE) and the Energy Regulatory Commission (ERC), which have both been pushing for the reforms. “The Supreme Court saw the need to uphold the role of the DOE - ERC in giving consumers the power of choice. With RCOA in place, ‘Constestable Customers’ or those consuming 1MW of electricity are now able to choose their power suppliers to reduce their costs,” Cusi said. “In the previous set up, electricity customers were captured by the distribution utilities within their franchise area and were forced to pay the contracted supply of their respective distribution utilities,” he added. The threshold for ‘Contestible Customers’ to have at least 1MW annual electricity demand is due to be reduced to 750kW two years after the implementation of the RCOA and the threshold will then be gradually reduced until even households will have the power to choose. According to Senior Policy Adviser of the Institute for Climate & Sustainable Cities and of Counsel of Dime & Eviota Law, Pete Maniego, the RCOA policies are mandated under the Electric Power Industry Reform Act (EPIRA). Incentives can also be given to companies for installing solar and other renewable energy systems that will reduce their peak and energy demand. Large energy users, perticularly commercial solar users, should benefit from the reforms.