Comments on the Revised Rules for Contestability

Section / Provision / Proposed Revision / Comment/Basis
Article 1. Section 3.
3.2 / Any Contestable Customer shall be allowed to enter into a Retail SupplyContract IRSC) with any legitimate prospective generation Companies, and shall be deemed compliant with the mandatory requirement despite thecommercial operation of such plant at a subsequent period of time. / Kindly include a definition for “prospective generation companies”.
3.5 / Any Generation Company that failed to put up the power plant as per its RSCwith the Contestable Customer shall be subject to strict monitoring. To supplythe affected Contestable Customer, a temporary supplier shall be appointed bythe ERC and shall be given six (6) months period to secure an RES license. / The allowable variance in the date of commercial operation of the prospective generation company and any liabilities of the parties is generally included in the RSC with the Contestable Customer. Thus, the appointment of a temporary supplier may not be necessary in this case. Moreover, the choice of supplier should be with the Contestable Customer, with mutual agreement from the supplier. Lastly, we would like to clarify why the appointment is with a non-licensed RES.
3.6 / Contestable Customer with no appointed RES by 26 June 2016 will either: (a) serve by the SOLR; or (b) remain captive (special circumstances, but with ERC approval). / We would like to kindly clarify what “special circumstances” are?
Section / Provision / Proposed Revision / Comment/Basis
General Comment
While it is stipulated in the EPIRA that the threshold level of Contestable Market be lowered to 750 KW after two years of the implementation of RCOA, it must be emphasized that supply is expected to be tight by the year 2016. As such, mandatory contestability for contestable customers with demand of 750 KW up may increase their cost (as they may be forced to source supply in the absence of an RSC to SOLR). We suggest that CSP rules first be established for contestable customers prior to the deadline to contract their capacity requirements. There must also be a threshold level for the price (i.e. lower than exisiting supply from DUs/ECs) that must be acceptable to the contestable customer otherwise, ERC shall allow the CC to remain captive in the meantime that the new plant is being constructed.
Article I Section 2. / Please clarify who are “All other relevant industry participants”. Will this include Aggregators?
Article I Section 3.5 / 3.5 … To supply the affected Contestable Customer, a temporary supplier shall be appointed…. The generating company shall provide replacement power based on the template that will be adopted by the ERC in the CSP. / To avoid complications, ERC should incorporate rule or guidelines for replacement power for plants to be built in the CSP rules. Appointment of RES supplier may result to terms that are not acceptable to the Contestable Customer as well as the RES.
Article I Section 3.6 / Or b) remain captive (special circumstances, but with ERC Approval) subject to the following conditions:
  • No offer received from RES inspite of several invitation and negotiations;
Price offer from RES is disadvantageous than being captive customer / For clarity, the Honorable Commission should specify what are the special circumstances.
Article II. Section 3. Basic Conditions for a DU prior to the declaration of RCOA in its franchise area / 3.1 An End-User who is qualified on the basis of the threshold level shall nevertheless be prohibitedbe allowed from participating in the Contestable Market where the DU which operates within its franchise area has failed to comply with any of the following conditions:
The DU shall be responsible for any cost that may arise from the RSC contract between a RES and CC due / There is a possibility that DUs/ECs will not comply on the conditions set forth by ERC to hold on the contestable customers and remain their captive customers. This will unduly prevent the CCs from exercising their freedom of choice.
Section / Provision / Proposed Revision / Comment/Basis
Article 1
Section 3 / Section 3. Guiding Principles
3.2 Any Contestable Customer shall be allowed to enter into a Retail Supply Contract (RSC) with any legitimate prospective Generation Companies, and shall be deemed compliant with the mandatory requirement despite the commercial operation of such plant at a subsequent period of time. / What is meant by a “prospective” Generation Company?
Suggested definition:
A Prospective Generation Company is an entity whose power plant is currently under construction.
3.5 Any Generation Company that failed to put up the power plant as per its RSC with the Contestable Customer shall be subject to strict monitoring. To supply the affected Contestable Customer, a temporary supplier shall be appointed by the ERC and shall be given six (6) months period to secure an RES license. /
  • What is the extent of “strict monitoring”?
  • The RES Contract should have such terms that in the event that the power plant is not put up on time, the Prospective Generation Company shall be responsible for sourcing the supply at the agreed price.
It is proposed that the second sentence should be removed as it is the duty of the RES and the Contestable Customer (CC) to foresee and provide for such contingency
3.1 Contestable Customers shall be given up to 25 June 2016 to contract for their capacity requirements.
3.6 Contestable Customer with no appointed RES by 26 June 2016 will either:
(a) serve by the SOLR; or (b) remain captive (special circumstances, but with
ERC approval).
3.8 These Rules shall be implemented in a manner that the freedom of choice shall be rightfully accorded to all Contestable Customers. /
  • What are considered as “special circumstances”?
  • The capture should also be time bound, i.e. no longer than one (1) year.
  • Does “freedom of choice” include the right of the CC to source supply from WESM, whether direct or indirect?
Section 3.6 should be revised as follows:
3.6 Contestable Customer with no [i] appointed RES, or [ii] WESM Membership, direct or indirect, by 26 June 2016 will either: (a) be served by the SOLR; or (b) remain captive (special circumstances, but with ERC approval).
  • Section 3.6 should also set out the “special circumstances” and the period of time such CC will remain a captive customer.

Article II
Section 2 / 2.4 The eligibility of an End-user shall be based on the monthly average peak demand as indicated by a single utility meter. An End-user maintaining multiple utility meters in a Single Premise has the option to consolidate its demand by requesting the DU to install a single main utility meter, which may result in modifications in its connection agreement and Distribution Wheeling Service Agreement with the DU. In this case, the basis for contestability is the consolidated forecasted demand, which shall be based on the historical coincident peak demand of all meters, except that an End-user whose coincident peak demand totaling at least seven hundred fifty kilowatts (750kW) is not measurable by all its meters will be treated as newly connected End-user. / Does this mean that a CC has the option to remain as a captive customer by maintaining multiple meters?
Section / Provision / Proposed Revision / Comment/Basis
Article 1
Section 3 / Section 3. Guiding Principles
3.4 The aforesaid Generation Companies shall secure the corresponding RES license sixty (60) days prior to commercial operation / Conflict with 2015 RES Rules Sectiion 2 (a) "No Person may engage in in supply of electricity to End-Users in the Contestable Market unless such Person has secured RES license from the ERC" and 2015 RES Rules Section 4.
3.5 Any Generation Company that failed to put up the power plant as per its RSC with the Contestable Customer shall be subject to strict monitoring. To supply the affected Contestable Customer, a temporarv supplier shall be appointed by the ERC and shall be given six (6) months period to secure an RES license / Conflict with 2015 RES Rules Sectiion 2 (a) "No Person may engage in in supply of electricity to End-Users in the Contestable Market unless such Person has secured RES license from the ERC"
The CC should choose its own Supplier rather appointed by ERC.

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