Meralco secures TRO on RCOA

MANILA, Philippines - Manila Electric Co. (Meralco) has secured court approval for its request to stop new rules on the retail competition and open access (RCOA) issued by the government until certain issues are ironed out.

In an order dated June 13, Pasig Regional Trial Court - Branch 157 presiding Judge Gregorio Vega Jr. granted Meralco’s plea for a temporary restraining order (TRO), enjoining the Department of Energy (DOE) and Energy Regulatory Commission (ERC) from implementing the new RCOA rules.

“The said temporary restraining order shall be effective for a period of 20 days from service to respondents DOE and ERC of this order,” Gregorio said in the court order.

The Pasig RTC court set a hearing of the case on June 23 and June 28, if needed.

Last May 27, Meralco sought court relief after the DOE and ERC issued new RCOA rules which it claimed are not in accordance with Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

Under the RCOA regime, end-users that are part of the contestable market, or contestable customers, are given the choice to choose their supplier of electricity aimed to foster competition in in the generation and supply sector.

Meralco currently supplies to contestable customers through its local retail electricity supplier (RES) MPower. To date, MPower accounts for about 50 percent of the market share of the contestable market within its franchise, or 18 percent of the total nationwide.

A local RES is defined as entities under a distribution utility (DU) that may engage in the business of supplying electricity to the contestable market without need of obtaining a license from the ERC.

However, the recent issuances of DOE and ERC related to RCOA rules will stop MPower from operating and will limit the power of choice of consumers, and therefore, should be declared null and void, Meralco said.

In DOE Circular DC2015-06-0010, any DU is not allowed to become a RES beyond its franchise area. It also ordered existing local RES to stop operating until the expiration of their respective retail supply contracts (RSCs).

Meanwhile, the ERC issued Resolution No. 5, requiring all interested parties to supply to the contestable market to secure a RES license while all DUs aspiring to become a RES are subject to restrictions.

In Resolution No. 10, the ERC removed the “local RES” in the list where RCOA rules apply and provided a timeline mandatory migration of contestable customers to RCOA.

ERC Resolution No. 11, meanwhile, disallowed any DU to retail electricity to the contestable market and ordered all local RES to wind down their operations in three years once the rules take effect.