ERC planning to set up power backup program

To meet the increasing demand for electricity, the Energy Regulatory Commission will set the supplies of last resort or SoLR, which would provide power to distribution utilities and consumers in times of high demand.

The ERC will conduct public hearings on the program starting January to discuss the draft guidelines for its implementation.

The guidelines provide a safety net for end-users in the contestable market in the event that their current electricity supplier is unable to continue providing service.

It also encourages contestable customers to choose their supplier of electricity upon the implementation of retail competition and open access. The SoLR, whose rates are higher than any competitive offer, will automatically serve customers who do not actively make a choice.

SoLR, as a regulated entity, has the obligation to serve end-users in the contestable market in a non-discriminatory manner. The temporary service obligation of SoLR as a backup electricity supplier to the end-users in the contestable market ends when they find a new electricity supplier. Contestable market refers to electricity end-users who have a choice of electricity supplier and with a monthly average peak demand of at least one megawatt for the preceding twelve months, at the time of the initial implementation of open access.

ERC also explained that the distribution utility shall perform the duties and obligations of a SoLR in its franchise area during the initial phase of retail competition and open access, until the ERC issues a decision allowing other entities to provide SoLR service on a competitive basis.

The approval of said guidelines is in anticipation of the implementation of open access and retail competition which is expected in mid-2006.

ERC chairman Rodolfo Albano Jr. said that the commission is gearing towards the last phase of the power reform agenda, which is market competition to encourage end-users in the contestable market to choose their supplier of electricity upon the start of retail competition and open access. - Wenna A. Berondo