DC2012-05-0005: Prescribing the General Policies for the Implementation of the Retail Competition and Open Access
Department Circular No. DC2012-05-0005, signed 24 May 2012 by DOE Secretary Rene D. Almendras. Establishes the foundational policy framework for implementing Retail Competition and Open Access (RCOA) under the EPIRA .
Trigger: ERC Certification of Pre-Conditions
The circular was issued after ERC certified, in ERC Case No. 2011-0041-RM dated 6 June 2011, that all five EPIRA Section 31 pre-conditions for RCOA had been fulfilled [DC2012-05-0005, Whereas clauses, 2012-05-24]:
- WESM established
- Unbundled transmission and distribution wheeling charges approved
- Cross-subsidy removal scheme initially implemented
- ≥70% of NPC’s Luzon and Visayas generating capacity privatized
- ≥70% of total energy output of NPC-contracted plants transferred to IPP Administrators
A Steering Committee to define RCOA policies was created under DC2011-06-0006 (17 June 2011) prior to this circular.
Core Framework
RCOA integrated into WESM. All Contestable Customers (CCs) must become WESM Trading Participants — directly or indirectly [DC2012-05-0005, §3, 2012-05-24].
Definitions established [DC2012-05-0005, §2, 2012-05-24]:
| Term | Definition |
|---|---|
| Contestable Customer (CC) | End-user in the Contestable Market who may choose their supplier |
| Captive Market | End-users without supplier choice, as determined by ERC |
| Supplier | ERC-licensed entity authorized to sell, broker, market, or aggregate electricity |
| Last Resort Supply Event | Supplier default triggering the SOLR mechanism (cessation, license revocation, non-payment, WESM suspension) |
| Open Access Date | ERC-determined date marking commencement of RCOA operations |
| Central Registration Body (CRB) | Entity managing customer switching systems and WESM settlement |
| Structural Unbundling | Separation of activities into separate entities with separate accounts |
| Functional Unbundling | Separation of wire from supply functions within a single DU |
Key Operating Rules
Customer choice [DC2012-05-0005, §4, 2012-05-24]: CCs may source from any ERC-licensed generation company, Supplier, DU affiliate constituted as Supplier, or the DU’s own supply business.
Suppliers [DC2012-05-0005, §5, 2012-05-24]: All ERC-licensed suppliers must register with PEMC as direct WESM Trading Participants and publish terms and conditions on the PEMC website.
Supply contracts [DC2012-05-0005, §6, 2012-05-24]: Minimum 1-year term following the WESM billing cycle; copies to be furnished to PEMC, ERC, and DOE.
Directly Connected Customers (DCCs) [DC2012-05-0005, §7, 2012-05-24]: Must register as WESM Customers (direct or indirect Trading Participants); upon contract expiration, treated as CCs if they meet the demand threshold.
Embedded generators [DC2012-05-0005, §8, 2012-05-24]: Must register with PEMC as non-scheduled Generation Companies.
Metering [DC2012-05-0005, §9, 2012-05-24]: DU is the Metering Service Provider (MSP) for all CCs, except DCCs connected to the NGCP-operated system; metering must comply with WESM standards.
Supplier of Last Resort (SOLR) [DC2012-05-0005, §10, 2012-05-24]: The franchised DU acts as SOLR when a Last Resort Supply Event occurs, sourcing electricity from WESM or other available supply.
Customer switching [DC2012-05-0005, §12, 2012-05-24]: CCs may switch supplier only every 6 months, at end of billing period; must notify PEMC at least 1 month in advance.
Captive market protection [DC2012-05-0005, §13, 2012-05-24]: DUs must procure supply for captive customers in the least-cost manner; DUs may serve CCs within their franchise as a separate Supplier entity.
Single billing [DC2012-05-0005, §14, 2012-05-24]: Supplier is the billing entity for CCs, issuing a single bill covering all applicable charges.
CRB Designation
PEMC was designated as the Central Registration Body (CRB) under DC2012-02-0002 (24 February 2012) and ERC Resolution No. 15, Series of 2006, confirmed in this circular [DC2012-05-0005, §16, 2012-05-24]. CRB responsibilities transferred to IEMOP upon its establishment as Independent Market Operator in 2018.
Subsequent Amendments
Amended by DC2012-11-0010, which provided additional guidelines and implementing policies for RCOA and modified certain provisions of this circular.
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