Government expects open access in power sector to kick off this year

MANILA, Philippines - The government is optimistic that the so-called open access in the power industry will kick off within the year.

Energy Secretary Jose Ibazeta said they are just waiting for the privatization of Malaya power plant’s contracts this month to pave the way for the said regime.

Open access will allow bulk power users or those with one megawatt (MW) power usage a choice where to source their requirements.

Ibazeta said once the sale of privatization of the independent power producer (IPP) contract of Malaya has been finalized, open access will surely be implemented.

“For Power Sector Assets and Liabilities Management Corp. (PSALM), they’re continuing to finalize the privatization. And when they finish the Malaya next week – they can announce open access,” he said.

PSALM is the agency mandated by the Electric Power Industry Reform Act of 2001 to privatize at least 70 percent of National Power Corp. is power plants and its contracts with third party power generators. 

Asked how soon the open access could be declared, Ibazeta said “The minute it’s awarded. But the ERC (Energy Regulatory Commission) also has to confirm it too.”

Ibazeta said if approved by the regulator, the open access can even kick off next week.

“Hopefully. Though, ERC will still have to confirm it, but as far as our records are concerned, if Malaya is sold – it should be immediately usher in open access,” he said.

He noted that the stall in the sale of Angat has nothing to do with open access declaration.

“The sale of the Angat does not have anything to do with it (open access) already. We’ve sold already over 93 percent of the generation assets. The Angat is not a problem but it has to be privatized,” he said.

Open access is envisioned to spur efficiency and competition in the once state-controlled power sector that had previously been the single biggest drain to public coffers.

At present, PSALM has breached the privatization threshold for Napocor’s power plants and is now only awaiting the sale of another IPPA contract to complete the EPIRA’s requirements.

The sale of 650-megawatt Malaya diesel plant output, which has been scheduled for bidding on June 16, would allow PSALM to breach the privatization threshold.

In the meantime, it would be noted that early this year, the ERC approved the rules for the Power Supply Option Program (PSOP) which will give bulk power users another option where to choose their power requirement. 

This new ruling will provide the regulatory framework to ensure the effective implementation of the PSOP and to provide an additional choice of supply to qualified customers. 

The PSOP is the latest addition to the existing supply programs such as the Customer Choice Program of Manila Electric Co. and the One Day Power Sale (ODPS) of the Napocor.

The new program will be available to Luzon grid electricity consumers with a monthly average peak demand of one MW for the past 12 months preceding the implementation of the said program.