The Energy Regulatory Commission (ERC) will be pursuing a ‘comprehensive study’ to assess the impact as well as technical intricacies in the power system if the threshold for retail competition in the restructured electricity sector will be brought down to 100 kilowatts (kW) from currently at 500kW.

ERC Chairperson Monalisa C. Dimalanta conveyed that the conduct of a comprehensive study was recommended by Senate Committee on Energy Vice Chairman Sherwin T. Gatchalian, that way, all concerns can be fleshed out before further implementation of the Retail Competition and Open Access (RCOA) policy will be enforced in the power sector.

“Senator Gatchalian required us to do full blown study before we lower the threshold – to most likely 100kW. We already have our internal study, but he doesn’t want it to be just ERC study – he wants us to outsource full consultancy,” she noted.

Dimalanta emphasized that the current tenor of discussion with the Department of Energy (DOE) is threshold lowering to 100kW, because that shall also correspond with the current level of contestable customers being allowed in the renewable energy (RE) sector.

The RCOA policy regime, in particular, allows qualified end-users – or those that are also known as contestable customers to exercise their ‘power of choice’ when it comes to signing up or procuring their power supply or electricity services from preferred providers.

It will also be the contestable customers who will be directly negotiating for the volume as well as the price that they would want in their power supply agreements (PSAs) with chosen retail electricity suppliers.

Beyond the comprehensive study being required by Congress, Dimalanta indicated that the ERC will similarly issue modified guidelines that will govern not just the retail suppliers but also the contestable customers in the retail market.

“The RCOA guidelines would be sort of Magna Carta. But more than Magna Carta, it also reinforces the obligations of the RES when they contract,” she said; adding that the Commission will likewise draw up its own scorecard for the players in the retail market.

When asked if ‘discipline’ will also be administered on the retail suppliers given the series of contracts’ renegotiation that happened when fuel prices used for electricity generation had surged in the world market as an aftermath of the Russia-Ukraine war, the ERC chief stated that “we can have strong regulation on this, but the point of RCOA is to deregulate the supply sector.”

On that precept, she pointed out that it is the players themselves that must be disciplining their ranks – primarily when it comes to the enforcements of the terms of their contracts.

“From our part, we make the rules really clear because one lesson we learned from the many disputes is that: it’s not too clear in their contracts. So we really have to make sure that the terms are clear, and we must have aggressive consumer education,” she asserted.