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    A RESOLUTION IMPOSING RESTRICTIONS ON THE OPERATIONS OF DISTRIBUTION UTILITIES AND RETAIL ELECTRICITY SUPPLIERS IN THE COMPETITIVE RETAIL ELECTRICITY MARKET

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    A RESOLUTION IMPOSING RESTRICTIONS ON THE OPERATIONS OF DISTRIBUTION UTILITIES AND RETAIL ELECTRICITY SUPPLIERS IN THE COMPETITIVE RETAIL ELECTRICITY MARKET

    Copyright:

    © All Rights Reserved
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    34 views3 pages

    ERC Resolution No11 Seriesof2016

    Uploaded by

    Hazel Pantig
    A RESOLUTION IMPOSING RESTRICTIONS ON THE OPERATIONS OF DISTRIBUTION UTILITIES AND RETAIL ELECTRICITY SUPPLIERS IN THE COMPETITIVE RETAIL ELECTRICITY MARKET

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 3

    Republic of the Philippines

    ENERGY REGULATORY COMMISSIO


    San Miguel Ave., Pasig City

    11

    RESOLUTION NO.

    , Series of

    2016

    A RESOLUTION

    IMPOSING RESTRICTIONS ON THE


    OPERATIONS OF DISTRIBUTION UTILITIES AND
    RETAIL ELECTRICITY SUPPLIERS IN THE
    COMPETITIVE RETAIL ELECTRICITY MARKET

    WHEREAS, as part of its regulatory powers under Republic Act No.


    9136 (RA 9136) otherwise known as the Electric Power Industry Reform Act
    'of 2001 (EPIRA), the Energy Regulatory Commission (ERC) is mandated to
    promote true market competition and prevent harmful monopoly and
    market power abuse in the electric power industry;
    WHEREAS, under the above mandate, the ERC also has an
    obligation to monitor and prevent any market power abuse or anti-~
    competitive or discriminatory act or behavior by any" participant in the
    electric power industry and, if .,deemed necessary, impose restrictions,
    sanctions or penalties;
    WHEREAS, the ERC sees the cogent need to provide safeguards in
    order to promote competj.tion and prevent harmful monopoly and market
    power abuse in light of the high level of concentration in the market based
    on data culled from its operations; .
    ,_
    WHEREAS, in light of the foregoing market assessment, the ERC
    proposed draft versions of the "Rules Governing the Issuance of Licenses to
    Retail Electricity Suppliers (RES') and Prescribing the Requirements and
    Conditions Therefor" (RES Licensing Rules) and of the "Revised Rules for
    Contestability" which were posted on the two (2) ERC-administered
    websites to solicit comments from the industry participants. The draft RES
    Licensing Rules contained restrictions on the transactions of stakeholders
    in the retail market. The public consultation and Focus Group Discussion
    (FGD) were consequently conducted to discuss the comments submitted by
    the stakeholders;
    WHEREAS, after deliberations of the firs( round of comments
    submitted by stakeholders, the draft of the instant "Resolution Imposing
    Restrictions on Distribution Utilities and Retail Electricity Suppliers in the
    Competitive Retail Electricity Market (CREM)" was posted on the
    Commission website on 8 April 2016, to, again, solicit comments from
    concerned stakeholdey ~

    11

    Resolution No. _,
    Page 2 of 3

    Series of 2016

    wHEREAS, after a careful consideration of the various views and


    comments submitted by interested parties and of the electric power
    industry participants, the ERC deems it appropriate to adopt modified
    restrictions on the operations of certain industry participants in the CREM;
    NOW THEREFORE, pursuant to its mandate to promote
    competition and protect customer interests and to establish the ultimate
    goal of achieving a robust and competitive retail electricity market, the ERC
    hereby RESOLVES to ADOPT the following:
    1.

    No Distribution Utility (DU) shall engage in the Supply of


    Electricity to End-users in the Contestable Market unless such
    supply is made in its capacity as a Supplier of Last Resort
    (SOLR).

    2.

    All Local Retail Electricity Suppliers (Local RES') shall wind


    down their business within three (3) years from effectivity the
    instant Resolution. Existing Retail Supply Contracts (RSCs)
    entered into with their respective Contestable Customers shall
    remain valid until the expiration of the said contracts subject to
    the winding down period. Accordingly, no new RSCs shall be
    signed and executed after the effectivity of this Resolution.
    During the said winding down period, the Local RES shall
    continue to comply with all reportorial
    requirements
    prescribed by the Commission.

    3. No RES shall be allowed to supply more than thirty percent


    (30%) of the total average monthly peak demand of all
    contestable customers in the CREM. The level of demand shall
    be determined by the ERC on a quarterly basis which should be
    posted on the website every 30th of the month following the
    quarter.
    4. No RES shall be allowed to transact more than fifty percent
    (50%) of the total energy transactions of its Supply business,
    with its affiliate Contestable Customers.
    Any RES not in compliance with this safeguard shall be given a
    period of two (2) years from 26 December 2016 to comply
    therewith: Provided further, That in no case shall it be allowed
    to execute any RSCs with Affiliates, nor renew its RSCs with
    the said affiliates unless such execution or renewal no longer
    amounts to a breach of the aforementioned safeguard.
    The ERC shall, within eighteen (18) months from implementation of
    the first phase of mandatory contestability, conduct a continuous review
    and monitoring of the market conditi~~~ ~determine
    relevance and

    applicabilityof any ofthe aboverestrictio~

    11

    Resolution No.
    Page 3 of 3

    Series of 2016

    In view of the above, Resolution No.

    22,

    Series of

    2013

    entitled

    "Resolution Adopting Amendments to Article I, II and III of the Revised


    Rules for the Issuance of Licenses to Retail Electricity Suppliers" is hereby
    repealed.
    Let copies of this Resolution be furnished all parties concerned and
    the University of the Philippines Law Center - Office of the National
    Administrative Register (UPLC-ONAR), all the licensed Retail Electricity
    Suppliers and Distribution Utilities.
    This Resolution shall take effect immediately following its publication
    in a newspaper of general circulation.
    Pasig City,

    12 May 2016.

    II~-- ~_..--..~.
    ~~VI"c~~i~s~
    u- Chairman and CEO

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    ALF~~
    Commissioner

    G~VIC~

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    E~2016~006-_?C-0306j~

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    ,

    . C. YAP-TARUC
    mmlSSlOner
    ~

    JOSEFINA
    MAGP
    -ASIRIT
    Commissioner

    lalo/lnm/dtIfNSS

    ONIMO D. STA. ANA .


    Commissioner

    :' .

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