The IIEE PH proposed solutions to ‘power crisis’

An engineer-friend, officer of the Institute of Integrated Electrical Engineers of the Philippines, Inc. (IIEE)  sent me a presentation by Engr. Garcia in late 2014. I copy-paste many of the slides here, no commentary (except a sentence in italics),  just sharing this with my blog readers and followers.
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“On ‘power crisis’, IIEE Proposed Solutions”
by Engr. Adelino V. Garcia, Jr., 2014

Metrics of Power Stability. To achieve a stable supply of electricity for a certain PEAK demand, the following Capacities MUST ALL be provided or satisfied:

  1. Load Following Frequency Regulation (LFFR) = 2.8% (at least) of Peak Demand
  2. Spinning Reserve = 10.2% (at least) of Peak Demand
  3. Stand By Reserve = Capacity of Single Biggest Generating Unit in a Grid = 10.2% of Peak Demand.

Ancillary Capacity = LFFR + Spinning Reserve + Stand-by Reserve = 23.2% of Peak Demand.

Required Capacity = Peak Demand + Ancillary Capacity.

For Luzon Grid, the Capacity Required to be Constructed Now (CRCN) for year N is at least:

CRCN = (Capacity Deficit from N-1 to N-2) + (Annual Capacities Required for N to N+3).

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Thus, CRCN for 2017 = (Capacity deficit from 2015 to 2016, if any) + Required capacities for 2017 to 2020.

A. Structural Solution:

Encourage Distributed or Embedded Generation Technologies (DGTs) that

  1. localize generation to demand centers and improve system stability and power quality.
  2. reduce pressure to Transmission Systems and Improves System Stability.
  3. provide localization of capacity in case of major PGF outage.

B. Technical Solution:

To address generation cost issues for DGTs due to economy of scales, select the most efficient technologies for capacities between 1MW to 20MW.

Pyrolysis or Gasification Technology can achieve Plant Electrical Efficiencies as high as 33% for capacities as low as 500kW, using Coal as Fuel (Note: Efficiency is Equivalent to 300MW PGF).

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Typical Gasified Coal Plant Capability — Can provide Base, Mid-Merit, and Peak Power Supply For Short – Medium – Long Term Capacity Solution.

Solar PV Technology — Can provide Day Peak Power Supply For Short – Medium – Long Term Capacity Solution.

* Day Peak can range from 15% to 35% of night peak demand
* Solar Penetration can be optimized around 15% to 30% of Peak Demand
* LCOE can be as low as PhP 5/kWh, rate impact can be as low as PhP 0.05 to Php 0.10 per kWh
* ECs MUST OWN to have economic benefit from the Solar PV Capacity
* 0.5MW to 1MW can be delivered in 10-12months

Run of River Hydroelectric Technology — Can provide Base, Mid-Merit, and Peak Power Supply For Short – Medium – Long Term Capacity Solution

* ECs MUST OWN to have economic benefit from the embedded hydroelectric capacity
* Generation cost is about PhP 5.0 to 3.5/kWh, from the 1st to 10th year of commercial operation
* Generation cost is about PhP 1.0 to 1.5/kWh, from the 11st to 25th year of commercial operation
* LCOE can be as low as PhP 3.00/kWh
* Delivery can be 20 to 24 months
* CAR Region has at least 1.5 GW to 2GW of hydroelectric potential

C. Policy Solutions

  1. National Government to Mandate “One Stop Shop” for Permitting and Regulatory Compliance and reduce development time from 3 years to 6 months.
  2. Government funds allocated to procure modular GenSets (PhP 18 – PhP 21/kWh), SHOULD rather be extended to DUs/ECs as Low Cost Equity to procure high efficiency embedded DGT/PGFs, reducing Capacity Supply Cost, saving on Transmission and Systems Loss Cost (PhP 2.00/kWh).
  3. Effective Cost of Capacity at 15kV Bus are composed of:

Generation Cost – PhP 5.25 to 5.5/kWh
TX and Ancillary Cost – PhP 1.8 to 2.0/kWh
Systems Loss Cost – PhP 0.50 to 0.65/kWh
Cost at 15kV Bus – PhP 7.50 to PhP 8.05/kWh
DGT Generation Cost – PhP 6.5 to 7.25/kWh
LFO Power Modules – PhP 15 to 21/kWh
HFO PGFs – PhP 11 to 13.5/kWh.

  1. If each Luzon EC will install as DGT/PGF about 25% to 30% of their respective Peak Demand, this capacity is estimated at 900MW to 1GW, that can be implemented in 12-18 months.

If another 30%- 50% are on IPP Scheme, but still DGT/PGFs, this will be another 1GW to 1.75GW that can be implemented in 20 to 24 months. That will be 1.9GW to 2.75GW Capacity in 20 to 24 months, MUCH LESS THAN THE 48 to 60 months required a 1GW large IPP Plant.

 

 

Why the FiT-All is a burden to consumers

* This is my article in BusinessWorld today.

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Last May 15, Transmission Corp. of the Philippines (Transco) presented at the Energy Regulatory Commission (ERC) its petition of Feed-in-Tariff Allowance (FiT-All) for 2017 of 26 centavos/kWh. Very fast adjustments from 4.06 centavos/kWh in 2015, rose to 12.40 centavos in 2016, and soon 26 centavos starting mid-2017, all “to save the planet.”

The ERC still has to conduct public hearings in Visayas and Mindanao until early June and likely to make an order by late June, to be reflected in our monthly electricity bills starting July 2017.

The feed-in-tariff (FiT) provision in the Renewable Energy (RE) Act of 2008 (RA 9513) is very anomalous on the following grounds: (1) guaranteed price locked in for 20 years despite technology improving very fast these days, (2) the FiT rates are rising (see table below) yearly due to inflation and forex adjustments, (3) FiT rates of P8+ to P10+ per kWh for wind-solar are way high compared to current Wholesale Electricity Spot Market (WESM) average prices of P2-P3/kWh, (4) current capacity installations for wind and solar are higher than what was allotted, and (5) even consumers in Mindanao who are not part of WESM, not connected to the Luzon-Visayas grids, are paying for this.

The total forecast cost revenue of FiT-eligible plants would be (in P Billion): 10.22 in 2012-2015, 18.54 in 2016, 24.44 in 2017, and 26.14 2018. The bulk of this will go to wind and solar plants.

(a) Wind: 6.32 in 2012-2015, 8.00 in 2016, 9.20 in 2017, 9.20 in 2018.
(b) Solar: 1.50 in 2012-2015, 5.88 in 2016, 7.03 in 2017, 7.00 in 2018
(c) Biomass: 1.86 (2012-2015), 3.95 (2016), 6.69 (2017), 6.79 (2018)
Hydro is small, only 1.52 in 2017 and 3.15 in 2018.
(Source: ERC, Case No. 2016-192 RC, Docketed April 27, 2017, Table 4)

Below are the beneficiaries of expensive electricity via FiT scheme by virtue of their hugeness and higher FiT rates.

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Many renewable firms were not able to snatch the limited FiT eligibility but they can still make money from expensive electricity via the renewable portfolio standards (RPS) provision of the RE law. The RPS coerces and forces distribution utilities (DUs) like electric cooperatives and Meralco to purchase a minimum percentage of their electricity supply from these expensive renewables, the price differential with cheaper conventional sources they will pass to the consumers. If DUs will not do this, they will be penalized and the cost of penalty they will still pass on to the consumers.

fitThe government should step back from price intervention and price control, grid prioritization of intermittent and unstable energy sources via legislation. Consumer interest of cheaper and stable electricity should be higher than corporate interest of guaranteed pricing for 20 years, lots of fiscal incentives and other privileges that are marks of cronyism. RA 9513 is anti-consumers, anti-industrialization and hence, it should be abolished soon.

Greenpeace, et al vs. “carbon majors” at the CHR

On September 2015, Greenpeace Southeast Asia + 13 PH-based NGOs, other individuals submitted to the Commission on Human Rights (CHR) a “P E T I T I O N, Requesting for Investigation of the Responsibility of the Carbon Majors for Human Rights Violations or Threats of Violations Resulting from the Impacts of Climate Change.”

I read about it only in July 2016 and I wrote on July 30, 2016:
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There’s a new development, unprecedented so far — having the Commission on Human Rights (CHR) — to accuse and harass multinational firms engaged in oil, cement, coal and mining.

From The Guardian last July 27, 2016:
“In a potential landmark legal case, the Commission on Human Rights of the Philippines (CHR), a constitutional body with the power to investigate human rights violations, has sent 47 “carbon majors” including Shell, BP, Chevron, BHP Billiton and Anglo American, a 60-page document accusing them of breaching people’s fundamental rights to “life, food, water, sanitation, adequate housing, and to self determination”.

I support the CHR and its Chairman Chito Gascon, a friend, in their fight against extra judicial killings (EJKs), hundreds of these cases so far nationwide since mid-May 2016 alone. Their time and resources can easily be depleted if they go person to person cases, dead or imprisoned. 

But I can not support the CHR in this new climate harassment. 

The first round of climate extortion is by governments of developing countries, demanding $100 B a year from governments of rich countries, under the various UN FCCC annual negotiations. So this is the 2nd round of extortion, NGOs and the Climate Change Commission (CCC) that prodded the CHR ultimately to result in demand for big money from big multinationals as “climate justice.” So whether we have bad El Nino (drought, less rain/no rain) those multinationals should be harassed and they should give money. Or if we have a bad La Nina (lots of rains, lots of flooding) those multinationals should still give money. 

A similar situation would be Mr. X having less money and more money and people say that it is proof that he’s poor, so government should send him more money and other subsidies.

I remember that last January, Chito posted about the CCC-CHR meeting. So it was the CCC that influenced the CHR to launch this HR investigation. The hypothesis “more CO2 emission = more global warming/anthropogenic climate change” is a global and UN-hyped movement. Then later via other schemes, these firms should pay huge amount of money to the “climate victims” like the thousands who died in Tacloban City in November 2013 during typhoon Haiyan (local name “Yolanda”).
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I checked the Greenpeace petition, these are the “carbon majors” that they are suing.

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Notice something? All are private firms, no government- or state-owned oil companies like Saudi Aramco, Rosneft (Russia), Petron/PNOC (Philippines), Abu Dhabi National Oil Co. (ADNOC), China National Petroleum Corp. (CNPC), Kuwait Petroleum Corp. (KPC), National Iranian Oil Co., Nigerian National Petroleum Corp., Oil India, Petroleos de Venezuela, etc.? All of these are non-“carbon majors”, maybe “carbon minors”? 🙂

I will meet CHR Commissioner Totsie Cadiz this week and ask about this weird case. Totsie is a friend, he is a rational lawyer, I hope to learn more about this from him.

Al Gore’s proposed $15 trillion carbon tax racket

According to the bible of Al Gore, the UN and other groups/individuals, we should be guilty that we are riding cars, jeepneys, buses, motorcycles, airplanes, boats, other machines that use fossil fuels. We should be riding only cows, horses, bicycles, skateboards other things that do not use fossil fuel. We should be guilty that we have 24/7 electricity mainly from base load coal and natgas power plants. Thus, we should send them more money via carbon tax so that they can “save the planet.” Nice but not-so-brilliant global robbery scheme.
http://www.washingtonexaminer.com/a-fools-errand-al-gores-15-trillion-carbon-tax/article/2622479

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The purpose of a carbon tax is to make cheaper energy, cheaper transpo, cheaper manufacturing, become expensive. National governments, the UN and Al Gore will get the extra money, trillions of $ of money and they will “save the planet”. http://www.carbontax.net.au/category/what-is-the-carbon-tax/

Al Gore, Obama, di Caprio, Richard Branson, etc., they hate fossil-fuel-guzzling airplanes a lot. https://wattsupwiththat.com/2015/04/20/want-a-green-pass-you-fly-your-own-private-jet-heres-how/

Meanwhile, the WB, IMF, ADB, DOF, etc already made a chorus that petroleum is a “public bad” because our use of cars, buses, boats, motorcycles, airplanes are bad for the environment, so they are raising the excise tax of petrol products by P6/liter across the board. Some legislators are not satisfied with this, they want additional tax on petrol products, coal power plants, etc. to get more money to “save the planet.” http://www.philstar.com/science-and-environment/2016/11/10/1642091/carbon-tax-eyed-philippine-polluters

People who are “non-polluters” are those who have zero demand for fossil fuels like petroleum and coal power plants. Like those who live in the caves, those who only ride horses, carabaos, bicycles or just walk/run only. For their trips to far away provinces and countries, they ride flying witches like manananggals that do not use fossil fuels.

The ecological socialists partner with “cap-carbon” capitalists for a multi-trillion dollars robbery of energy consumers. New racket indeed, but it is bound to fail. People hate more expensive energy, more government/UN taxation.

The quest for more stable and cheaper electricity in the ASEAN

* This is my article in BusinessWorld last April 28, 2017.

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High economic growth means high energy demand coming from stable supply and competitively priced energy, not unstable, intermittent, and expensive energy. This is what the Association of Southeast Asian Nations (ASEAN) economies need as their high GDP growth of 4.7% in 2016 is projected to improve to 4.8% this year and 5% in 2018 (ADB data), much faster than the projected growth of other regions and economic blocs.

One week before the ASEAN 50th Summit Meeting, the 7th Annual Meeting of the Nuclear Energy Cooperation Sub-Sector Network (NEC-SSN) hosted by the Department of Energy (DoE) was held. A pre-feasibility study showed that many ASEAN countries are in favor of using nuclear energy for commercial use. The ASEAN Center for Energy (ACE) also sees nuclear energy as a long-term power source for the member-countries.

The intensive infrastructure projects of the Duterte administration require huge amount of energy. The proposed 25-km. subway in Metro Manila by the Japan government alone would require high energy supply for the dozens of trains running simultaneously below the ground plus dozens of train stations below and above ground.

Lots of base-load power plants, those that can run 24-7 all year round except when they are on scheduled shut down for maintenance, will be needed. These baseload plants include coal, natural gas, geothermal, and nuclear. Hydro plants too but only during the rainy season.

How reliable and how costly are the different power generation plants that the Philippines and other ASEAN countries will need? This table will help provide the answer as I have not seen data for the ASEAN yet.

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Power reliability is represented by plant capacity factor or actual power output relative to its installed capacity. So unstable, intermittent sources like wind and solar have low capacity factor, not good for manufacturing plants, hotels, hospitals, malls, shops, and houses that require steady electricity supply.

Power cost is represented by the levelized cost of electricity (LCOE), composed of capital expenditures (capex), fixed and regular operation and maintenance (O&M), variable O&M, and transmission investment. CCS means carbon capture and sequestration.

The cost of ancillary services for intermittent sources, the standby power plants if the wind does not blow or if it rains make solar plants temporarily inutile, does not seem to be reflected in the transmission cost though.

ASEAN countries like the Philippines will need those power plants that have (a) high reliability, high capacity factor, (b) low LCOE, and (c) low or zero need for ancillary services.

However, more ASEAN countries are entertaining more solar PV and wind onshore since they were convinced to believe that they need unstable yet expensive electricity to “save the planet.”

During the Energy Policy Development Program (EPDP) lecture last April 20 at the UP School of Economics (UPSE), Ms. Melinda L. Ocampo, president of the Philippine Electricity Market Corp. (PEMC) talked about “Electricity Trading and Pricing in the Philippine WESM.” Ms. Ocampo discussed among others, the new management system where the interval for electricity dispatch has been improved from one hour to only five minutes.

I pointed during the open forum that the imposition of the lousy scheme feed-in-tariff (FiT) or more expensive electricity for favored renewables was unleashed even to consumers in Mindanao, which is not part of WESM, and is not connected to the Luzon-Visayas grids. The FiT-Allowance that is reflected in our monthly electricity bill has risen from 4 centavos/kWh in 2015 to 12.40 centavos in 2016 and this year, we should brace for at least 26 centavos/kWh soon because the 23 centavos petition by Transco starting January 2017 has not been acted by the Energy Regulatory Commission yet.

The issue of stable and affordable energy will be tackled in the forthcoming BusinessWorld Economic Forum this May 19, 2017 at Shangri-La BGC. Session 4 “Fuelling Future Growth”of the conference will have the following speakers: John Eric T. Francia, president & CEO of Ayala Corp. (AC) Energy Holdings, Inc.; Antonio R. Moraza, president & COO of Aboitiz Power Corporation; Josephine Gotianun Yap, president of Filinvest Development Corp., and DoE Secretary Alfonso G. Cusi. Yap and Cusi are still to confirm the invite.

Local energy players will have a big role in ensuring that the Philippines should have stable and competitively priced energy supply today and tomorrow.

Developing Asia’s love affair with coal

Energy precedes development, not vice versa. Developing countries cannot sustain growth without cheap and stable energy supply.

I am reposting some recent reports about efforts by many developing Asian countries to grow fast via cheaper energy from coal power. Enjoy.
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“Pakistan’s Water and Power Ministry… investment project with China, it’s committed to spending $15 billion on as many as 12 new coal power plants over the next 15 years…

To anyone who would criticize the move, Piyush Goyal, India’s power minister, had this to say: “India is not a polluter,” he told the Financial Times. “It’s America and the western world that has to first stop polluting.” There’s a grain of truth to that: America and Europe did a lot of coal burning during their development, and now have strong economies to leverage in order to clean up their acts.” – May 3, 2017, https://www.technologyreview.com/s/604323/india-and-pakistans-continued-love-affair-with-coal/

“$54 billion China Pakistan Economic Corridor (CPEC), which includes spending of about $33 billion on a total of 19 energy projects, including coal-fired and renewable power plants, transmission lines, and other infrastructure.

Combined, the projects will eventually generate 16,000 megawatts (MW) of electricity, which the government says is urgently needed. About three-quarters of the newly generated power will come from coal-powered plants, and the government insists that these will be fitted with the latest technology to reduce pollution and climate-changing emissions.” – May 2, 2017, http://www.reuters.com/article/us-pakistan-energy-coal-idUSKBN17Z019

“China’s production of electricity from coal stayed at elevated levels post the northern hemisphere winter after reaching a high of 423.6 billion kWh in December – and the highest level recorded based on available data going back to January 2010.

And electricity production from coal in March 2017 rebounded strongly following the Lunar New Year lull in February, rising 7.7% year on year to 396.1 billion kWh, according to the National Bureau of Statistics data.” – May 2, 2017, http://blogs.platts.com/2017/05/02/china-coal-fired-power-generation-surprises-naysayers/

“India is heavily reliant on coal for its electricity, more than three-quarters of which was generated by its 132 coal-fired power stations in 2014-15, according to the most recent data from the central electricity authority. However, while it is the world’s third-biggest emitter of greenhouse gases in absolute terms, its per capita emissions are a fraction of many other nations’, at just 1.59 metric tonnes a year, compared with 7.55 for China and 16.39 for the US.” – May 3, 2017, https://www.ft.com/content/18268438-2e3e-11e7-9555-23ef563ecf9a

“A MoneySuperMarket report listed Mozambique, Ethiopia and Zimbabwe as having “the most environmentally friendly people in the world,” while ranking Americans as being some of the least eco-friendly people on the planet. That may not be a bad thing, though, given the greenest countries also tend to be poor and run by authoritarian regimes.” – April 22, 2017, http://dailycaller.com/2017/04/22/worlds-greenest-people-live-in-ridiculously-poor-authoritarian-regimes-graph/

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“America was built on cheap and abundant coal. Fossil fuels powered the U.S. into the industrial age and replaced inefficient windmills and woodburning as the primary sources of electricity. America currently has access to 500 years’ worth of coal — far more than any other nation. Even despite the last decade’s war on coal during the Obama years, the U.S. still derives about one third of our power from coal — second only to natural gas.” – April 17, 2017, https://spectator.org/coals-colossal-comeback/

“China’s fundamental demand for coal and natural gas has improved alongside better-than-expected economic growth in the first quarter,” Tian Miao, an analyst at North Square Blue Oak Ltd. in Beijing, said by phone. “The government’s investment in infrastructure has boosted power consumption while the move to replace coal with gas to fight pollution is also gaining some traction for gas demand.” – April 17, 2017, https://www.bloomberg.com/news/articles/2017-04-17/china-coal-production-rises-as-government-avoids-output-limits

“Coal conversion has become profitable in China because of an unusual combination of low coal prices relative to state-set gas or petrol prices.  Coal-to-liquids projects normally make economic sense only when oil prices are high or supply is limited. The technology was first developed in Nazi Germany, and commercialised in apartheid-era South Africa.” https://www.ft.com/content/02931290-1d94-11e7-a454-ab04428977f9

“despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here).

coal3In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar’s minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year.” – May 3, 2017, http://www.washingtonexaminer.com/todays-most-productive-energy-workers-are-in-coal-and-gas-not-solar/article/2622029

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“According to a recent International Energy Agency (IEA) report, Japan’s 600 MW Isogo plant in Yokohama is probably the best in the world. It is an ultra-supercritical HELE plant, with emission levels comparable to a natural gas combined cycle (NGCC) power plant.” — April 18, 2017, https://dddusmma.wordpress.com/2017/04/18/japan-and-china-remarkably-clean-coal/

“The Petra Nova carbon capture system was installed in the W.A. Parish generation station. This is the largest and cleanest fossil fuel generaton station in the United States.” — April 18, 2017, https://wattsupwiththat.com/2017/04/18/clean-coal-carbon-capture-and-enhanced-oil-recovery/

India’s “plans to build nearly 370 coal-fired power plants… The construction of 65 gigawatts worth of coal-burning generation with an additional 178 gigawatts in the planning stages would make it nearly impossible for India to meet those climate promises, the researchers say.” — April 25, 2017, https://wattsupwiththat.com/2017/04/25/india-wont-be-able-to-meet-paris-climate-agreement-commitments-due-to-expanding-coal-power-plants/

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Two other useful sources here,

  1. http://www.jcoal.or.jp/eng/
  2. GWPF, “THE PARIS AGREEMENT and the Fifth Carbon Budget” by David Campbell, http://www.thegwpf.org/content/uploads/2016/09/Campbell.pdf  (13 pages long)

Bottomline: more environmentalism, more UN, more government renewables cronyism are bad for developing economies that want cheaper energy for them to develop faster and sustain growth.

On the retail competition and open access (RCOA) and EPIRA

* This is my article in BusinessWorld on April 19, 2017.

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Electricity distribution, unlike generation, is defined as a “public utility” and hence, is granted as a monopoly right via congressional franchise. There are more than 120 distribution utilities (DUs) such as Meralco and electric cooperatives.

To dilute this monopoly, the Electric Power Industry Reform Act (EPIRA) which was passed in 2001 came with Section 31, Retail Competition and Open Access (RCOA) that “shall be implemented not later than three (3) years upon the effectivity of this Act,” and Section 29, Supply Sector, “The supply of electricity to the contestable market …” These are useful, anti-monopoly provisions, thanks to EPIRA.

The RCOA was finally implemented 12 years after, on June 26, 2013. The Department of Energy (DoE) and the Energy Regulatory Commission (ERC) issued orders to implement this beautiful provision.

But somewhere along the way, what should be a competitive scheme has become a “mandatory” order.

Some electricity consumers are unhappy because their choice to stay with their DUs — especially if these provide them good service and prices — has been done away with. This is why they went to the Supreme Court (SC) and asked for a Temporary Restraining Order (TRO) against the RCOA.

Below is a summary of these orders (one from DoE, four from ERC, and one from the SC).

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The SC TRO has mixed signals. It is good because (a) it stopped the “mandatory migration” to RES by contestable customers (CCs) and thus, they have the option to stay with their DUs or not, and (b) local RES will be allowed again. But it can also be bad because (a) it stopped the voluntary participation of CCs for 750kW (lowered threshold), and (b) some ERC Resolutions suspending earlier prohibitions to Retail Electricity Suppliers (RES) are also removed.

Government prohibitions should be kept to the minimum as much as possible.

These prohibitions would give people — especially those with very low technical and financial capacities — the right to become RES which might invite abuse of CCs.

2017041893842Such prohibitions should not include more RES players, the right of CCs to stay with their DUs or not, and voluntary participation of customers at 750kW.

EPIRA has provided for more customer choices, strengthened consumer empowerment, and demonopolization of electricity generation and distribution. Let this spirit stay in the succeeding orders of the DoE and the ERC.