Frequently Asked Questions (as of June 2013)

1. When is the commercial operation of Open Access and Retail Competition (OARC)?

The commercial operation of Open Access and Retail Competition shall commence on June 26, 2013.

2. Can a Contestable Customer (CC) have a choice to remain witht the Distribution Utility (DU) upon the commercial operation of OARC?

Section 4.1 of the Transitory Rules as amended, a CC that fails to enter into a Retail Supply Contract (RSC) by June 25, 2013 shall be deemed to stay with its current DU until December 25, 2013, or until such time that it is able to find a Retail Electricity Supplier (RES), provided that it informs the DU of such fact on or before June 25, 2013.

3. If a CC already participated in the competitive retail market, can a CC go back as captive customer of a DU?

If a CC decides to move from the regulated service of a DU come June 26, 2013 and enter into an RSC with a RES, such CC shall no longer be allowed to revert back to the DU's regulated service. The said CC shall remain permanently in the competitive retail electricity market without prejudice to Section 2.6, Article II of the Rules of Contestability.

4. If a CC opted to remain with the DU regulated service come June 26, 2013, can a CC switch antime to a RES?

Yes. However, a CC should advise the DU that it will be leaving the DU's regulated service at least sixty (60) days prior to the effectivity of its RSC with a RES.

5. Can a CC source from multiple suppliers?

In case of multiple suppliers, it is the CC who should source its power requirements from a mix of suppliers are coursed through and represented by a single RES, i.e. the CC enters into a single RSC with a single suppliers.

In addition, CCs with multiple utility meters that have registered demand for each of 1MW is also allowed to source from different suppliers, because the eligibility of an end-user is based on a one utility meter one customer basis.

E.g.: CC has 4 meters with 1MW+ of each meter-

Meter 1:    RES A   Meter 3:   RES C
Meter 1:    RES A   Meter 3:   RES C

 

 

6. What are the eligibility requirements to be part of the Contestable Market?

Section 31 of RA 9136 or the Electric Power Industry Reform Act (EPIRA) prescribes that upon declaration of the Open Access Date: End-users certified by ERC to have an average peak demand of at least 1MW for the most recent 12 months shall be allowed to participate in the Contestable Market.

During the 1st phase of retail competition:

(a) Previous non-eligible end-users with increased demand which must have a 12-month average registered demand of at least 1 MW.

(b) Newly connected end-users with a forecasted peak demand of at least 3 MW are eligible to be part of the Contestable Market.

(c) Newly connected end-users with a forecasted peak demand between 1 MW-3 MW must have a registered peak demand of at least 1 MW for 3 consecutive months to be eligible.

Eligibility is based on a one utility meter = one customer basis. An end-user with multiple utility meters that have registered demand for less than the threshold is not allowed to aggregate the consumption to reach 1 MW, during the first phase of OARC.

End-users with peak demand levels attaining the threshold but have multiple power sources (e.g. connected to the DU and has its own generator) should inform the ERC and show proof ot its eligibility. Their qualification to the Contestable Market will be subject to ERC approval.

7. How are CCs certified?

The DUs provide the ERC with a list of eligible end-users within their respective franchise areas, which will be the basis for certification. (In the case of directly connected customers, the NGCP provide the list of eligible end-users connected to its system.) The ERC will issue certificates to these end-users through the DU/NGCP. In turn, the DU/NGCP will notify end-users of their eligibility in writing, with the corresponding certification.

8. Can a CC waive or cancel its eligibility and revert to the Captive Market?

An eligible CC will not be allowed to revert to the Captive Market. However, if the CCs demand drops to less than 25% of the threshold (250kW for the 1st phase) for a 6-month period and the same is not attributed to seasonal demand changes, it may seek ERC approval to allow it to revert to the Captive Market. If approved, the CC must settle its obligations with its RES.

9. What are CCs choices?

As a CC you have the following choices in procuring your electricity supply:

Contract with a RES or Local RES

Self Procure. You can buy your electricity from the WESM, subject to WESM requirements.

Self Generate. You can produce your electricity.

Default. In case you fail to choose a RES or Local RES, you may be served by the Supplier of Last Resort (SOLR).

A CC cannot purchase electricity directly from a Generation Company unless the latter establishes its RES business and secures a RES license from the ERC.

10. Is the Local RES retail rate the same as the regulated rate of a DU?

The Local Res retail rate is a competitive rate, meaning it is not regulated by the ERC. Prices of electricity to be charged by the Local RES may be similar to a regulated rate of a DU, or a rate similar to other RES.

11. Will my existing DU treat my company differently if I buy from another RES?

No. The Code of Conduct for Competitive Retail Market Participants directs the DU to provide fair and non-discriminatory access to its facilities and regulated services, and no preferential treatment should be given to its Local RES or any other affiliate company. The essence of open access is for a transmission service provider and distribution utility to allow any entity the use of its facilities and the availment of its services. Violation of the said rules shall be dealt with accordingly by the ERC

12. Are there deadlines to meet by the CCs in contracting with a RES?

None. Resolution No. 11, Series of 2013 provides that a CC can stay with its respective DU until such time that it is able to find a RES. In case a CC decides to participate in the competitive retail market, it should advise the DU that it will be leaving the DU's regulated service at least sixty (60) days prior to the effectivity of its Retail Supply Contract with a RES.

13. With retail competition, will the reliability of my electric service change?

No, whichever supplier of electricity you choose, your electricity will continue to be delivered safely and reliably by your current DU, whose service is still regulated by the ERC. You will not experience any change in the quality of the energy delivery when switching to another electricity supplier, since there are no changes to the electric delivery system.

14. What will be the arrangement between the RES and the DU & NGCP?

The RES wll transact with the DU on behalf of the contestable customer for the Distribution Wheeling Service. The DU shall be responsible for procuring and charging for Transmission Wheeling Service on behalf of the contestable customers that are connected to the distribution network. The RES will handle the provision of billing, settlement and collection services in behalf of its customers.

(Wheeling is a technical term for the delivery of electricity through the facilities of NGCP and DUs)

15. Is it possible to set a price ceiling for RES?

Contract-wise, since the RSC is a non-regulated instrument, the RES may offer any pricing scheme it would like to use. However, this pricing scheme must be transparent and must be thoroughly explained to the CC.

Policy-wise, in other jurisdictions such as the PUCTs or the Public Utility Commission of Texas, they have a mechanism called the Price-To-Beat (PTB) mechanism. This is a soft regulation which somewhat works like a suggested retail rate (SRR) based on the cost of power and the prevailing retail market rate. Customers were advised that the closer the RES' offer would be to the PTB who encounter any RES whose offer would come close or hit this figure were advised that such offers

16. Is there a program for technical support/customer service on the part of RES?

The RES should have a helpdesk for the concerns of its CCs, especially since the CC does not have any personality in delaing with the DU as the distribution wheeling service contract would be between the RES and the DU and not the CC and the DU.

17. If sub-station/power lines fail, how will the coordination be?

The RES and the DU should agree on a protocol regarding the steps to be taken in addressing failure of power lines and the information dissemination program of such to the affected CCs.

18. With the possibility of a higher rate at the commencement of OARC, what will our approach in dealing with tenants?

That would entirely be dependent on how the RES would price the RSC. There are several pricing mechanisms in the market which could be used by the RES which would cater to the specific needs of its CCs. Also, demand response would help in lowering the rates even more.

19. What will happen if the projected demand is higher than the actual demand?

It would be dependent on the RSC'S type contract (whether it is fixed or metered). If the contract is on a metered basis, this should not be a concern since the RES would be billing the CC on the actual consumption of the CC. If the RSC is on a block basis then there should be a provision for minimum energy charge, where the CC is billed on a contractual amount of energy and should the CC consume less than this amount, it would be billed for the unused amount of energy. Commonly, the rate of the amount of energy in question would be equal to the contract rate.

20. What will happen if the projected demand is lower than the actual demand?

It would be dependent on the RSC's type of contract (whether it is fixed or metered). If the contract is on a metered basis, this should not be a concern since the RES would be billing the CC on the actual consumption of the CC. If the RSC is on a block basis then there should be a provision for additional energy charge, where the CC is billed on a contractual amount of energy and should the CC consume more than this amount, it would be billed for the amount of energy above what had been contracted. Normally the rate of the amount of energy in question would be equal to the contract rate or the WESM settlement price.

21. What will be the agreement if there will be power interruption coming from the Generator/DU?

That would be a RES-Generator Bilateral contract (BCQ) and would no longer be covered by the OARC rules. Suffice to say that there should be provisions in the BCQ that should address such circumstances.

22. Can a CC refund the DU electric (energy) deposit? Can it be applied to the selected RES?

The DU deposit would be between the actual connected customer and DU. Presently, the rules prescribe that it should be refunded directly by the DU to the CC as the latter transfers initially into the retail market, after all other customer or DU obligations have been settled.

23. Brief discussion on the relationship in OARC set up

a. DU and RES

The relationship between a DU and a RES would be defined by the Distribution Wheeling Service Agreement (DWSA). Prior to the EPIRA, the DWSA was between the DU and the CC. The RES would be entering into the DWSA on behalf of the CC. The RES would be billed by the DU for wheeling service, which in turn would be passed through charge by the RES to the CC.

b. CC and DU

The relationship between a CC and a DU would be defined by the Connection Agreement (CA). There would be a one-time fee based on the facilities that were connected to and the materials used in the process of connecting the CC to the DU lines. The relationship would be limited to this. Should the CC be disconnected for any reason and request for reconnection, a reconnection fee would again be charged on the same basis.

 

 

 

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