Understanding the Dynamics
of Electricity Trade in the
Philippines with the Entry of
Retail Competition and Open
Access
Discussion Flow
A Background of the Industry
Open Access and Retail Competition
The New Players
Updates
The Way Forward
A Background of the Industry
EPIRA
- To ensure
adequate and
reliable power
supply
- To ensure the
nondiscriminatory
use of
Transmission
and distribution
network
facilities for the
benefit of the
consumers
- To ensure
competitive
market driven
prices through
healthy
competition
among
electricity
suppliers
- To ensure
transparency of
rates through
itemization and
segregation of
various
components of
electricity tariffs
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End goal of the EPIRA: Competitive
Electricity Prices
The goal of the EPIRA is a
vibrant power industry with
healthy
competition
creating competitive prices
of electricity for the
benefit of the consumer.
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The industry before and after open access
After
Before
Generation &
Transmission
Distribution
& Supply
CREM
Captive
Customers
Generation
Transmission
Distribution
Supply
Captive &
Contestable
Customers
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Reformed
Power Sector
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Open Access and Retail Competition
What is Open Access?
Non-discriminatory use
of transmission and
distribution facilities
Transmission open access is already in place
Distribution open access to commence with
retail competition
What is Retail Competition?
better offer
here
I have no choice
Now
With Competition
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5 Conditions Precedent
Unbundling
Removal
of
Subsidy
WESM
NPC Assets
IPP
Administrator
Privatization
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2 Additional Conditions
Designation
of the
Central
Registration
Body (CRB)
Establishment
of the B2B
System
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Electricity Markets
Competitive
Retail
Electricity
Market
WESM
CREM
Competitive Retail Electricity Market (CREM) refers to the retail market once
Open Access and Retail Competition commences.
The New Players
The Contestable Customer
An electricity End-user that belongs
to the Contestable Market under
Open Access and Retail Competition.
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The Retail Electricity Supplier
A Retail Electricity Supplier (RES)
is a person or an entity authorized
by the ERC to sell, broker, market
or aggregate electricity to
end-users in the Contestable Market.
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Who may obtain a license?
1.
A Generation Company
2. A Distribution Utility which will operate outside its franchise area or
suppliers which will operate outside the Economic Zones
3. An Affiliate of a DU
4. An IPP Administrator
5. Entities who would be Selling, brokering or marketing electricity to
contestable customers
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The Local Retail Electricity Supplier
The business segment of an Electricity
Distribution Utility entity catering to
the
Contestable Market only within its
franchise area.
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The RES & The LOCAL RES
RES
Local RES
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Supplier of Last Resort
The Supplier of Last Resort (SOLR)
is an entity designated by the ERC
to serve contestable customers
following a last resort supply event
or a SOLR event
CREM
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SOLR Reasons
You failed to choose
your supplier of
electricity upon
Open Access Date
You failed to find
a willing supplier
of electricity
RES ceased
operations
RES violated obligations
to DU
RES is no longer
allowed to trade in
the WESM
RES license was
revoked
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18 licensed RES
26 SOLRs
Retail
Electricity
Supplier
(RES)
Supplier of
Last Resort
(SOLR)
Contestable Customers
1 MW & up
745 - Luzon
96- Visayas
5 Local RES
Local RES
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Ensuring Continuous Electricity
Supply for the Consumers
With the wide array of electricity
supplier choices made available to
the consumer, continuous power
supply at competitive rates
and efficient service will be assured.
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Updates
Rules for RES Licensing- July 13, 2005 (Amended: Feb 1, 2006 & Feb 15, 2011)
Business Separation Guidelines- Sept. 22, 2006
Distribution Services and Open Access Rules- Jan. 18, 2006
Code of Conduct- June 7, 2006
Supplier of Last Resort (SOLR)- June 21, 2006
Rules on Rate Filing by the SOLR- Oct 10, 2007
Competition Rules- June 23, 2006
Rules on Customer Switching (RCS)- Sept. 26, 2007
Rules for Contestability- Jan. 23, 2008
Updates
The Issuance of ERC Resolution 27,
Series of 2011 directing the
Distribution Utilities to:
1.
Install TOU Meters in the
facilities
of
customers
consuming a monthly average of
at least 1MW; and
2.
Provide a 12 month load data to
customers consuming a monthly
average of at least 1MW.
Updates
The Contestable Market (August 2012)
Grid
Luzon
MERALCO
Visayas
VECO
No. of
Customers
Power Demand
745
2,488 MW
628
1,804 MW
96
757 MW
39
225 MW
18 licensed
Retail
Electricity
Suppliers
(RES), 26 SOLR
providers
and 5 Local
RES
The Way Forward
Updates
Transitory Rules for the Competitive
Retail Electricity Market (CREM)
Objectives:
•
•
To ensure the smooth transition from the
existing structure to a competitive
environment.
To promote the interests of all stakeholders
in the electricity industry.
Salient Features:
• Effectivity of 1 year from December 26, 2012.
• 6-month Transition period from Dec 26, 2012 to June 26, 2013.
• DU to continue supply to Contestable Customers
(CCs) during the 6-month transition period.
• CCs have the option to maintain supply from the DU, in so far as the latter’s
function as a Local RES.
• CRB to develop the B2B IT System & Market Manuals prior to
the 6-month transition period.
• CCs who fail to enter into an RSC shall be serviced by the designated
SOLRs.
• SOLRs for DCCs shall be the designated SOLR for the franchise area
where the DCC is located.
• Protocols and processes in the ERC promulgated OARC rules shall be
adopted during the transitory period and the initial OARC phase.
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The Way
Forward
Accounting, Billing and
Settlement Rules and Procedur
The Establishment of the B2B System
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Assess your Company
Requirements
Current bill
Attractive Value Added Services
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Due Diligence
RES Profile
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END OF PRESENTATION
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www.erc.gov.ph
ERC websites:
www.buyyourelectricity.com.ph
E-mail address:
[email protected]
Telephone numbers:
(02) 914-5000 Loc. 147
Tel/Fax number:
(02) 633-3253
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