Meralco, others not yet ready for open access

MANILA, Philippines - The power industry is not yet ready for open access which the Energy Regulatory Commission (ERC) wants to implement by end of this year, a group of power utilities said.

In a joint letter to the ERC, power distributors led by Manila Electric Co. (Meralco) said they should be given more time to prepare for the open access scheme.

Meralco is joined by the Philippine Rural Electric Cooperatives Association Inc. and the Private Electric Power Operators Association Inc. in asking the ERC to extend the Dec. 26 deadline for the implementation of open access to a “more viable date.”

“We submit that the time required to promulgate the rules and to procure, design, deploy, test and commission the needed systems and infrastructure... will extend well beyond [Dec. 26],” they said.

The group said the time provided by the ERC to prepare for open access would not be enough for all the logistics, particularly the procurement of the system for the process.

“Our concern stems from the fact that the remaining time between now and [Dec. 26] will be grossly inadequate for the completion of both the policy framework as well as the establishment of the necessary systems,” the utilities said.

Open access will allow consumers to choose their power suppliers, in contrast to the current practice of distribution utilities sourcing electricity on behalf of their customers.

The implementation of the scheme was anchored on the completion of the last remaining mandate under the Electric Power Industry Reform Act of 2001 (EPIRA), that of the privatization of at least 70 percent of government’s power plants and contracted output with independent power producers.

In a recent decision, the ERC confirmed that the government has met the privatization threshold and has scheduled the start of open access on Dec. 26, 2011.

The introduction of open access will be gradual, starting first with end-users with a 12-month average demand of at least one megawatt. The coverage will then be expanded over the succeeding years until it reaches the household level.

In their plea to the ERC, the power utilities said systems for accounting, billing and settlement of transactions under an open access environment would also need time to complete.

They argued that the procurement of such systems and accompanying infrastructure could take 12 to 15 months after regulations, protocols and standards are projected to have been finalized by the regulator before the year ends.