THE Manila Electric Co. (Meralco) obtained a temporary restraining order (TRO) against the implementation of resolutions issued by the Energy Regulatory Commission (ERC) and a Department of Energy (DOE) circular on the Retail Competition and Open Access (RCOA).
The TRO is good for 20 days. The 13-page order, issued by Judge Gregorio Vega Jr. of Pasig Regional Trial Court Branch 157, stated: “Based on the evidence presented by [Meralco], as well as the evidence presented by the DOE and ERC in opposition thereto, [Meralco] has clearly established compliance with the requisite requirements in support of the grant and issuance of its prayer for a TRO,” the court said.
In particular, the DOE was enjoined from implementing and enforcing its circular DC2015-06-0010. The same applies to ERC Resolution 5, 1, Sections 2 and 3 thereof, Resolution 10 and 11 insofar, as they prohibit distribution utilities (DUs) from engaging in the supply business, impose market cap and other restrictions specified therein, and require mandatory contestability.
The ERC resolutions effectively prohibits DUs’ local retail electricity suppliers (RES) from participating in the RCOA as suppliers of electricity. While they allow DU-affiliate RES to participate in the RCOA, ERC Resolution 11 unduly imposed a 30-percent market cap, where all RES are not allowed to supply more than 30 percent of the total average monthly peak demand in the retail market.
In addition, the same resolution also prohibits RES from supplying more than 50 percent of the capacity requirements of their affiliate contestable customers.
ERC Resolution 10 and DOE circular also provide for mandatory contestability and exclude local RES in their scope.
The court said Meralco’s rights were “substantially and materially invaded and violated by the questioned DOE circular and ERC resolutions.”
“Meralco has clearly established its rights, as well as that of its local RES, MPower, to supply to the captive market and the contestable market based on Section 29 of the Electric Power Industry Reform Act or Epira.”
The court said these rights had been affirmed and confirmed in subsequent DOE circulars issued in 2012 and 2013, and ERC Resolutions issued in 2005 to 2014. The DOE and ERC encouraged the active participation of Meralco and MPower in the contestable market and required the unbundling of regulated and unregulated activities of DUs.
Meralco’s participation in the contestable market substantially increased, becoming a major player in this segment.