Open access and retail competition in power sector to start in September 2012

MANILA, Philippines—Energy Secretary Jose Rene D. Almendras has vowed to start the implementation of open access and retail competition scheme by September 2012, as he expected the Department of Energy (DoE) and other concerned agencies to have threshed out all the issues by then.

“We’re almost 100 percent sure that we will be able to do that by our committed timeline,” Almendras said on the sidelines of the Energy Investment Forum on Tuesday.

The energy secretary said the government has been working hard to solve all the infrastructure, system and procedural challenges and put all the necessary mechanisms in place.

Separately, Energy Undersecretary Josefina Patricia M. Asirit, said that the September timeline was the commencement date deemed as feasible by the DoE’s steering committee.

“We must make sure that the proposed timetable will be able to meet the rules and regulations of the Energy Regulatory Commission…We are now looking at various scenarios and we have factors to consider such as the generation capacities, level of supply and demand, readiness of power distributors, readiness of contestable market, readiness of retail electricity suppliers,” Asirit said.

However, this proposed September timeline has yet to be submitted to the Joint Congressional Power Committee (JCPC) for approval.

The Energy Regulatory Commission announced last October that it had decided to defer the implementation of the open-access scheme as the government would not be able to put in place all the critical infrastructure needed for its operations by December 26 this year.

Under the open-access regime, large power users will be able to choose their own electricity suppliers, unlike the current system, which has limited them to the supplier with jurisdiction over their respective areas. The open access scheme is expected to further spur competition among power stakeholders, resulting in better, more competitive electricity prices.

The energy chief, however, admitted that they have not completed reviewing whether or not open access could truly help in bringing down electricity rates, particularly at the retail level.

“If you’re talking about the contestable market [or the large power users], yes there’s a chance for electricity prices to go down. But for the rest of the consumers, maybe not yet as their supply is still the same. So we really want to manage it because if you don’t manage the open-access scheme well, it might increase further prices for consumers. That’s why we need to be careful and we need to pace it,” Almendras earlier said.