DC2013-07-0013: Providing Supplemental Policies to Empower Contestable Customers under RCOA and Ensure Greater Competition in the Generation and Supply Sectors

Department Circular No. DC2013-07-0013, issued 2 July 2013 by DOE Secretary Carlos Jericho L. Petilla. Provides supplemental policies to address structural problems in the RCOA’s early implementation: CCs were finding it difficult to obtain clear offers from RES, and the market was perceived as supplier-dominated rather than customer-empowered.

Situation at issuance: Only 19 RES and 8 Local RES were licensed; RES favored larger, higher-load-factor customers; offers were either unavailable, above existing DU rates, or tied to long-term contracts with stringent pre-termination provisions [DC2013-07-0013, whereas clauses, 2013-07-02].

Key Provisions

Direct GenCo contracting (§1): CCs may now enter Retail Supply Contracts directly with a Generation Company (not limited to RES or Local RES), provided the GenCo has an ERC Certificate of Compliance, is a registered WESM Trading Participant, and secures an ERC Supplier’s license before the RSC takes effect [DC2013-07-0013, §1, 2013-07-02].

Mandatory switching clause (§2): Every RSC must include a “Customer Switching” provision allowing CCs to terminate and switch to a more competitive offer, regardless of contract period. Incumbent RES retains a right of first refusal — it may match the superior offer to retain the CC. Initial switch still locked out for 6 months from RCOA Commercial Operation Date. ERC to issue guidelines for determining “competitiveness” of a supply contract [DC2013-07-0013, §2, 2013-07-02].

Dual power bill for DU-served CCs (§3): CCs who remain with their DU (due to absence of acceptable RES offers) receive two bills:

1. Current power bill (existing format)
2. New unbundled bill showing separately: (a) generation and supply charges; (b) regulated charges (transmission and distribution wheeling); (c) pass-through charges (government taxes and subsidies)

Purpose: familiarize CCs with the competitive billing system before switching. DUs must submit monthly summary rate schedules to DOE within 10 days after each reference month [DC2013-07-0013, §3, 2013-07-02].

ERC regulatory role (§4): ERC issues guidelines and parameters for determining “superior offer”; ERC resolves disputes on offer competitiveness [DC2013-07-0013, §4, 2013-07-02].

Effectivity: 15 days after publication in at least 2 newspapers of general circulation.

Full text: Cleaned copy