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SC stops DOE, ERC from limiting major power consumers' supply choices

IMPENDING DEADLINE. The Supreme Court notes the urgent need to issue a temporary restraining order since the government set a February 26, 2017 deadline for major power consumers to follow its new regulations. File photo by LeAnne Jazul/Rappler

IMPENDING DEADLINE. The Supreme Court notes the urgent need to issue a temporary restraining order since the government set a February 26, 2017 deadline for major power consumers to follow its new regulations.

File photo by LeAnne Jazul/Rappler

MANILA, Philippines – The Supreme Court (SC) issued a temporary restraining order (TRO) stopping the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) from pushing through with new regulations that would compel major power consumers to buy their electricity only from 23 designated retail electricity suppliers (RES).

"The Court noted that petitioners have established a clear, legal right to the TRO considering that the EPIRA Law (Electric Power Industry Reform Act) provides for the voluntary migration of end-users to the contestable market and there appears to be no basis for the mandatory migration being ordered by the DOE and the ERC through the questioned issuances," SC Spokesperson Theodore Te said in a press briefing on Tuesday, February 21.

The SC TRO covers the following issuances of the DOE and the ERC:

The new regulations defined major power consumers as those with a monthly average peak demand of one megawatt (MW).

These major power consumers would be forced to abandon their current power supply contracts and enter into new contracts with any of the 23 suppliers chosen by the ERC.

In its ruling, the SC noted the urgent need to issue the TRO since the ERC had imposed a February 26 deadline on the consumers to enter into new contracts.

"If a TRO is not issued, the petition will become moot and petitioners stand to suffer grave and irreparable injury because they will be disconnected from the distribution utility or made to pay a supplier of last resort a 10% premium between the higher contract cost and the Wholesale Electricity Spot Market (WESM)," said Te.

Right to freedom of choice

The petition against the DOE and the ERC had been filed by the Philippine Chamber of Commerce and Industry, Ateneo de Manila University, San Beda College-Alabang, and mall owner Riverbanks Development Corporation.

The petitioners argued that the new regulations are unconstitutional, since electricity consumers would be deprived of their right to freedom of choice.

They also pointed out that these new regulations do not promote free competition, because certain distribution utilities would be unable to participate in the contestable market, even if they can offer the lowest price to consumers.

Ultimately, the petitioners said, electricity rates would increase, and so would the prices of goods and services.  Rappler.com