Open access in power sector seen by mid-2010

BIG industries will finally be able to choose their power supplier by the second quarter of next year under an interim open access program.

Francis Saturnino Juan, Energy Regulatory Commission (ERC) executive director, said the countdown for the said scheme, which was designed to promote competition and efficiency in the once state-controlled power sector, has started following the privatization of the 600-megawatt Calaca coal-fired power plant.

“Based on the interim open access terms of reference, once the plant is turned over then open access will already start,” he said.

Under the interim open access, eligible customers with bulk energy requirements like large industries may choose which power generating companies can supply them.

This diverges from the present practice of electric utilities entering supply agreements with power plant owners on behalf of their customers.

In July, DMCI Power Corp. acquired the Calaca plant for $361.71 million from the government’s power sector privatization program supervised by the Power Sector Assets and Liabilities Management Corp. (PSALM).

DMCI Power is the power-generating arm of DMCI Holdings Inc., which also has interests in construction, real estate and mining.

Nestor Dadivas, DMCI Power president, said that the company expects to take control of the Calaca plant by March 31 next year.

The company is currently conducting negotiations with PSALM for the plant’s turnover and finalizing the rehabilitation program for the facility. The 600-megawatt plant, which has been running for more than two decades, has been only producing at a capacity of around 350 megawatts.

Juan, however, said that the interim open access will only be voluntary on the part of distribution utilities, customers and generating companies until the full-blown interim open access in the power sector kicks off.

But most of the industry players are expected to participate in the program since the proposal for such a scheme came from them.

Industry players have been clamoring this since the government has been slow in terms of meeting the requirements of the country’s power sector reform and restructuring program, which started almost nine years ago.

Under the Electric Power Industry Reform Act of 2001 (EPIRA), the actual open access would commence once PSALM completes the law’s last remaining conditions—the privatization of 70 percent of National Power Corp.’s (Napocor) generating and contracted capacities in the Luzon and Visayas.

The privatization threshold for Napocor’s plants has already been breached while the level of the contracted capacities sold is now around 34 percent.

Juan said that if the last condition of the EPIRA is achieved before the start of the interim open access, then the latter would be “moot and academic.”

“But we don’t know how fast [PSALM] can achieve this,” he added. –Euan Paulo C. Añonuevo, Reporter, Manila Times