Question & AnswerQ&A (ERC Resolution NO. 03, S. 2006)
The main objectives are to promote free and fair competition and accountability in the Electric Power Industry to achieve greater operational and economic efficiency, and to ensure consumer protection and enhance the competitive operation of the retail electricity market.
Only persons who have secured a Supplier's License from the Energy Regulatory Commission (ERC) may engage in the supply of electricity to End-users in a Contestable Market, except Distribution Utilities serving their franchise area and those authorized to supply electricity in Economic Zones.
An applicant must be a natural person of legal age duly registered with the DTI or a juridical person duly registered with the DTI, SEC, or CDA, engaged in retail electricity supply business.
The applicant must possess any of the following: an investment grade credit rating by a reputable credit bureau; unused cash resources equivalent to expected monthly billings or Php 5 million; or proof of creditworthiness certified by companies that have extended credit to the applicant.
A RES or its affiliates, stockholders, directors, officers or their relatives within the fourth civil degree shall not own any interest in TRANSCO or its Buyer or Concessionaire, or Independent Market Operator. Additionally, no officer or director of TRANSCO or its Buyer or Concessionaire may be an officer or director of any RES, except ex-officio government-appointed representatives.
Applicants must submit Articles of Incorporation or Business Name Registration, Mayor's Permit, RES Information Sheet, audited financial statements, business plan, list of affiliates, sworn statements to comply with regulations and ownership rules, proof of payment of fees, list of directors and officers, and other documents required by ERC.
RES must ensure functional and structural unbundling if engaged in generation or distribution, provide updated information for consumer choice, adopt ERC-approved business systems, segregate billing components, comply with creditworthiness and financial security requirements, follow WESM rules if sourcing power from the spot market, comply with competition rules, collect Universal Charge, notify ERC before ceasing operations, inform ERC of material changes, and adhere to applicable laws and Regulations.
Persons acting as RES without a valid ERC license may face fines, penalties, suspension or revocation of license, and other sanctions as provided by existing laws, rules, and ERC regulations.
Each RES must file monthly reports containing average retail sale prices by customer category and service territory, total revenues, list of customers and deposits, bank certification of escrow deposits, and other information required by ERC.