The Energy Regulatory Commission issued a resolution revoking the moratorium on the license issuance to retail electricity suppliers.
The regulator issued Resolution No. 9 series of 2021 dated Nov. 17 revoking Resolution No. 17 series of 2014 and suspending the issuance of RES licenses following a Supreme Court order.
It said the lifting of the moratorium would allow contestable customers to choose their own suppliers.
Eight RES, with 265 contestable customers, are expected to file for the renewal of their respective licenses within the year.
“These customers shall be left without a supplier and may be exposed to the higher prices of the supplier of last resort should the ERC fail to issue RES licenses,” the ERC said.
The Supreme Court recently declared as void the issuances of the ERC and Department of Energy pertaining to the mandatory compliance to the retail competition and open access rules.
RCOA allows power consumers to choose their own power suppliers as mandated by the Electric Power Industry Reform Act of 2001.
The SC granted the consolidated petitions seeking to void DOE Circular 2015-06-0110 and ERC Resolutions 5, 10, 11 and 28 series of 2016 in relation the implementation of RCOA.
Several groups including the Philippine Chamber of Commerce and Industry alleged that the DOE and ERC issuances which had been the subject of a temporary restraining order issued in February 2017 are unconstitutional and go against consumers’ “power of choice”.
The issuances required large power users or those with consumption of 500 kW and above to sign contracts with any of the 23 ERC-licensed RES under the stipulated deadlines.
Failure to comply would result in disconnection from their respective distribution utilities.
ERC Resolution 11 imposed restrictions on distribution utilities and retail electricity suppliers and prohibited DUs from participating as suppliers in the contestable market and gave local retail electricity suppliers three years to wind down their business. It also barred them from entering into new retail supply contracts.
The petitioners to the case, however, said migrating to another supplier should be “voluntary” under the provisions of the EPIRA, making the issuances “patently unconstitutional” and in violation of free enterprise and anti-trust.
The SC decision stated that the EPIRA included public utilities like DUs and electric cooperatives to be suppliers in the contestable market, consistent with the DOE’s earlier issuances on the RCOA implementation.
The SC further stated that the earlier issuances “emphasized customer choice” by giving the qualified consumers the “liberty to source from licensed and authorized” local RES in line with EPIRA’s underlying objective of “creating a free and competitive market that will provide reliable electricity at reasonable prices.”
The Court declared the assailed issuances “void for being bereft of legal basis” and directed the ERC to promulgate supporting guidelines to the remedied 2017 circulars issued by the DOE.