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The Energy Regulatory Commission (ERC) approved on 13 February 2012 a Resolution amending Section 2.6 (Modifications and New Physical Connections: Residential) and Section 2.7 (Modifications and New Physical Connections: Non-Residential) of the Distribution Services and Open Access Rules (DSOAR). The amendments are intended to, among others, clarify gray areas and harmonize DSOAR with related rules and regulations including the Magna Carta for Residential Electricity Consumers.
The amendments, among others, featured the following: (1) clarification that cost of installation or extension of lines and facilities that are included in the DU’s capital expenditures (CAPEX) program as approved by the ERC must be shouldered by the DUs. This is regardless of the location of the electricity consumer requesting line facilities in the DU’s franchise area; (2) clarification that when other electricity end-users connect to lines and facilities paid for by non-residential customer as contribution in aid of construction (CIAC), the said lines and facilities will form part of the DU’s regulatory asset base (RAB). Consequently, the DU must refund the CIAC to the concerned non-residential customer; (3) exemption from advancing the costs of lines and facilities even if the project is not viable is accorded to socialized housing projects under R.A. 7279 otherwise known as the Urban Land and Housing Development Act, including relocation or resettlement projects of concerned agencies of the local and national government. A project is considered viable if the cost of installing the lines and facilities is at least equal to the revenues gained from the customers connected to such lines and facilities, as determined under existing ERC rules and regulations; and (4) providing an option to non-residential consumers to advance the cost of the lines and facilities, subject to refund by the DU. The option is similar to the option given to residential consumers.
Prior to the amendments, the right to extension of lines and facilities for residential customers is limited within 30 meters from the distribution utilities secondary voltage lines and the excess thereof shall be advanced by customer to cover the expenditures. On the other hand, the non-residential customers have the right to extension of lines and facilities within the Standard Connection Facilities definition and beyond that they have to bear the non-refundable expenses which shall be treated as CAIC (Contribution in Aid of Construction). Under the amended DSOAR, provided that the project is viable, the residential and non-residential customers have the right of extension of lines or facilities regardless of location within the franchise area.
DSOAR was promulgated in 2006 to lay down the terms and conditions related to: (1) provision of connection assets and services; (2) service to the captive market; (3) Supplier of Last Resort (SoLR) service given to the contestable market; and (4) unbundled distribution wheeling service (DWS) provided to the contestable market. It also sets the procedures for establishing regulated service rates for distribution utilities (DUs) in accordance with the Distribution Wheeling Rate Guidelines (DWRG) and DUs not covered by the DWRG.
"Amendments to the DSOAR were promulgated by the ERC in furtherance of its mission to promote and protect the welfare and interests of electricity consumers. Electricity consumers, both residential and non-residential, will have their requests for lines and facilities acted upon accordingly, without any cash outlay, regardless of their location within the franchise area since the DU will shoulder the costs for as long as the project is viable. Rest assured that the ERC will continue to find more ways to make the electricity service more accessible to the public,” ERC Chairperson and CEO Zenaida G. Cruz-Ducut expressed.
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