Regulator defers open access scheme anew

The over 800 customers who have already been qualified to participate in the open access and retail competition scheme may have to wait a year longer when the platform is expected to be fully operational.

The Energy Regulatory Commission and the Department of Energy said the open access scheme should have been operational by Dec. 26, 2012.

But ERC executive director Francis Saturnino Juan explained that the proponents would need at least another year to ease the transition, lay down the necessary infrastructure and fine-tune the rules and regulations that would govern the mechanism.

Juan said that the transition period would start on Dec. 26, 2012 and end on June 26 next year when commercial arrangements would have been finalized between the retail electricity suppliers (RES) and qualified customers.

RES refers to those qualified to sell power under the open access scheme.

The transition period will allow “concerned parties to undertake all their assigned tasks to ensure a smooth transition to full open access implementation,” the regulator said.

The activities will include preparations “as well as the realization of the different stages of operationalizing the mechanism for open access. This covers the registration, discussions, trainings, and simulations among Suppliers, Contestable Customers, and other stakeholders.”

The ERC has also set a trial run sometime in March 2013, and expects commercial transactions based on an interim development system to take place in June.

From June 26, 2013 up to Dec. 25 of that year, the IT infrastructure will be established, while the ERC is expected to finalize the rules and regulations, Juan said.

Under the open access regime, large power users will be able to choose their own electricity suppliers, unlike under the current system where they are limited to the supplier that has jurisdiction over their respective areas.

This scheme is expected to further spur competition among power stakeholders, resulting in better, more competitive electricity prices.

Eventually, the scheme will be extended up to the retail level or households.

It is highly critical, particularly for these large power customers and industrial firms who will be the first customers of this scheme, for the government to ensure a smooth transition to the open access regime because this is being eyed to have the same effect as the Ecozone Rate Program (ERP), in terms of competitive electricity pricing.

Under the ERP, which will expire by Dec. 25 this year, industries or ecozone locators accredited by the Philippine Economic Zone Authority (Peza) enjoy government-subsidized rate of P3.90 per kilowatt-hour.

This program currently affects 2,709 companies, which directly employ 915,260 workers and account for 43 percent, or around $19 billion, of the aggregate Philippine manufacturing exports.

Despite the delays, Energy Secretary Jose Rene D. Almendras said that the government had a “clear and workable roadmap (for open access) … a well-paced roadmap to ensure we do not rush and instead have each activity happen at a pace that will ensure successful implementation.”

Almendras has since declared that, for the large power users, there is a huge chance for electricity prices to go down under the open access scheme, provided a smooth transition takes place.

It is thus critical for all the necessary frameworks and structures to be put in place prior to the full implementation of the mechanism—one reason why the open access and retail competition scheme has been delayed several times.