# DC2013-07-0013 — Supplemental RCOA Policies to Empower Contestable Customers ## Department Circular No. DC2013-07-0013 **Providing Supplemental Policies to Empower the Contestable Customers under the Regime of Retail Competition and Open Access and Ensure Greater Competition in the Generation and Supply Sectors of the Philippine Electric Power Industry** Issued: 2 July 2013 by DOE Secretary Carlos Jericho L. Petilla Effectivity: 15 days after publication in at least two newspapers of general circulation --- ## WHEREAS RECITALS 1. EPIRA Section 2 declares the State policy to: (a) ensure quality, reliability, security and affordability of electric power supply; (b) ensure transparent and reasonable electricity prices in a regime of free and fair competition and full public accountability; and (c) protect the public interest as affected by rates and services of electric utilities and power providers. 2. DOE is mandated to supervise power sector restructuring, formulate implementing rules, and exercise such other powers necessary to attain EPIRA's objectives. 3. DOE has issued RCOA policies through: DC2012-05-0005 (9 May 2012) — general RCOA policies; DC2012-11-0010 (28 November 2012) — additional guidelines and amendments; DC2013-05-006 (6 May 2013) — enjoining participants to ensure effective RCOA transition through transparency, good governance, and greater competition. 4. CCs have raised difficulties obtaining clear and firm offers for Retail Supply Contracts (RSCs) from RES. 5. During Information and Education Campaigns (IECs), CCs reported that most RES prefer larger loads with higher load factors; offers, when available, are either above existing rates or come with long-term contracts and stringent pre-termination provisions. 6. Despite 19 RES duly licensed and 8 Local RES authorized by the ERC, RCOA is being perceived as a Suppliers' market — limiting CCs to unfavorable offers or no offer at all — contrary to the Customer Empowerment objectives of EPIRA. --- ## OPERATIVE PROVISIONS **Section 1. Customer Choice.** Consistent with EPIRA, its IRR, and other applicable rules, a CC may source its electricity supply requirements from: - ERC-licensed RES; - ERC-authorized Local RES; and - On its option, directly through the Wholesale Electricity Spot Market (WESM). A CC shall also be allowed to enter into a Retail Supply Contract with a prospective **Generation Company**, provided that: (a) the Generation Company holds a Certificate of Compliance (COC) from the ERC and is successfully registered as a Trading Participant in the WESM; and (b) before the RSC's effective date, the Generation Company has secured a Supplier's license from the ERC. **Section 2. Supply Contract and Customer Switching.** Regardless of the contract period of the RSC between a CC and its RES, such RSC shall include a **"Customer Switching" provision** allowing the CC to terminate its RSC with its incumbent RES should a more competitive supply contract package exist. The incumbent RES has the right to retain the RSC provided it can match the superior offer. The initial switch of a CC to its new Supplier shall only be allowed six (6) months after the full RCOA Commercial Operation Date, consistent with DC2012-11-0010 Section 8. Actual switching timelines are as agreed between the RES and CC, but may not exceed the CRB notification requirement under that DC. The ERC shall issue guidelines for determining the competitiveness of an RSC; competitiveness may include price, quality of power, and value-added services. **Section 3. Transparency of Electricity Rates under RCOA.** A CC with no acceptable offer from RES or Local RES continues to be served by its franchised DU at existing rates until it secures an RSC; thereafter, switching is subject to CRB and incumbent RES notification requirements. For customer empowerment and transparency, a CC still served by its franchised DU shall receive **two power bills**: (i) its current power bill (existing format); and (ii) a new unbundled power bill, further grouped according to competitive and regulated charges, ERC-approved, showing: - generation and relevant supply charges; - regulated charges (transmission and distribution wheeling charges); and - other pass-through charges (government taxes and subsidies). The second bill prepares CCs to understand how their bill will transition to the competitive billing system. The ERC shall ensure no double-charging of DU administrative charges. Transmission, distribution wheeling rates, and pass-through charges shall be publicly disclosed on the DOE, ERC, and PEMC websites. All DUs shall submit to the DOE a monthly summary schedule of rates not later than **ten (10) days** after the reference month. **Section 4. Regulatory Support.** ERC shall issue guidelines and parameters for determining a "superior offer" by a RES. Disputes on superiority of competing offers shall be referred to and decided by the ERC. **Section 5. Repealing Clause.** Nothing in this Circular shall repeal existing mechanisms or responsibilities under existing rules, except insofar as may be manifestly inconsistent herewith. **Section 6. Separability Clause.** **Section 7. Effectivity.** Fifteen (15) days after publication in at least two newspapers of general circulation; remains in effect until otherwise revoked.