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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. OC 201@ - O4 - 0004
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PROVIDING TIMELINES FOR COMPLIANCE WITH THE
FULL IMPLEMENTATION OF RETAIL COMPETITION AND
OPEN ACCESS IN THE PHILIPPINE ELECTRIC POWER INDUSTRY

WHEREAS, Section 2 of the Republic Act No. 9136, otherwise known as the “Electric
Power Industry Reform Act of 2001 (EPIRA)” declared the Policy of the State among
others the following:

(a) Ensure the quality, reliability, security and affordability of the supply of
electric power;

(b) Ensure transparent and reasonable prices of electricity in a regime of free
and fair competition and full public accountability to achieve greater
operational and economic efficiency and enhance the competitiveness of
Philippine products in the global market;

(c) To enhance the inflow of private capital and broaden the ownership base
of the power generation, transmission and distribution sectors; and

(d) Protect the public interest as it is affected by the rates and services of
electric utilities and other providers of electric power;

WHEREAS, upon compliance with the pre-conditions set forth under Section 31 of the
EPIRA, the Retail Competition and Open Access (RCOA) shall be mandated in the following
manner:

(a) Initial implementation for electricity end-users with an average demand of
one (1) megawatts (MW) and above, for the preceding twelve (12)
months;

(b) Two (2) years after the initial implementation, reduce the threshold to 750
kilowatts (kW) electricity end-users where at this level, Aggregators shall
be allowed to supply electricity to electricity end-users whose aggregated
demand within a contiguous area is at least 750 kW; and

(c) Thereafter, the Energy Regulatory Commission (ERC) shall evaluate the
performance of the market, which-outcome shall be the basis of the
reduction of the threshold level until it reaches the household level;

WHEREAS, Section 37 of the EPIRA further mandates the Department of Energy (DOE),
among other things to:

(a) Supervise the restructuring of the electric power industry;

(b) Formulate such rules and regulations as may be necessary to implement
the objectives of the EPIRA; and

(c) Exercise such other powers as may be necessary or incidental to attain the
objectives of the EPIRA.

Energy Center, Bonifacio Global City, Taguig City, Philippines
Tel. No. 479-2900; Fax 812-6194

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WHEREAS, in compliance with its mandate under the EPIRA, the DOE has promulgated
policies to ensure the efficient, effective and consistent implementation of RCOA with the
end view of upholding the objectives of EPIRA in promoting customer choice and fostering
competition in the generation and supply sectors;

WHEREAS, the RCOA commenced last 26 June 2013, starting with electricity end-users
with an average demand of one (1) MW and above but provided an interim option for
Contestable Customers (CCs) to remain with their franchised Distribution Utilities (DUs)
as Captive Customers until such time that they are able to secure their respective Retail
Supply Contracts (RSCs) with a licensed Retail Electricity Supplier (RES) or Local RES;

WHEREAS, the DOE issued Department Circular No. DC2015-06-0010 entitled “Providing
Policies to Facilitate the Full Implementation of Retail Competition and Open Access in the
Philippines Electric Power Industry;”

WHEREAS, the DOE takes cognizance of the challenges raised by the Energy Regulatory
Commission in adhering to the timelines set forth under DC2015-06-0010 particularly on
the simultaneous implementation of mandatory contestability of 750 kW End-users and
demand aggregation;

WHEREAS, the DOE also recognized the operational limitations raised by the Philippine
Electricity Market Corporation (PEMC) as the Central Registration Body (CRB) in mandating
simultaneously the 750 kW contestability and aggregation, to include among others,
readiness of metering requirements and the need to prepare and educate the new
Contestable Customers; and

NOW, THEREFORE, for and in consideration of the foregoing, the DOE hereby issues,
adopts and promulgates the following:

Section 1. Compliance to Full Contestability by Contestable Customers with
Average Demand of One (1) MW and Above. Compliance with Section 1 of DC2015-
06-0010 shall be no later than 26 December 2016. ,

Section 2. Contestability of End-users with Average Demand Ranging Below 1
MW to 750 kW. Compliance with Section 2 (a) of DC2015-06-0010 shall be voluntary
effective 26 June 2016 and mandatory effective 26 June 2017. Similarly, pursuant to
EPIRA, the implementation of Section 2 (b) of DC2015-06-0010 is hereby amended to 26
June 2017 thereby allowing retail aggregation.

Section 3. Separability Clause. If any section or provision of this Circular is declared
invalid, the other parts or provisions hereof which are not affected thereby shall continue
to be in full force and effect.

Section 4. Repealing Clause. Except insofar as may be manifestly inconsistent
herewith, nothing in this Circular shall be construed as to repeal any of the mechanisms
already existing or responsibilities already provided for under existing rules.

Section 5. Effectivity. This Circular shall take effect immediately following its publication
in at least two (2) newspapers of general circulation.

Issued at Energy Center, Bonifacio Global City, Taguig City.

ZENAIDA' ¥. MONSADA
Secretary Ir

APR 21 2016
DOV ly 04 -090

Department Circular No. DC Providing for the Revised Timelines for the Full Implementation of Retail
Competition and Open Access in the Philippine Electric Power Industry Page 2 of 2

Republic of the Philippines
DEPARTMENT OF ENERGY

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