ERC issues Rules on Rate Filing for SOLR

The Energy Regulatory Commission (ERC) issued Resolution No. 25, Series of 2007 adopting the “Rules on Rate Filing by the Supplier of Last Resort (SOLR)”. The Rules provide for the uniform filing system for applications by the SOLR for the approval of SOLR rates/charges to the affected contestable market. “The Rules spell out the policies, rules and procedures to ensure the recovery of allowable premium and reasonable return and other costs associated with the SOLR service,” ERC Chairman and CEO Rodolfo B. Albano Jr. said.

The Rules, which are applicable to all SOLRs, specify the filing requirements, procedures for filing, reportorial requirements and administrative sanctions if said Rules are violated. A SOLR is a regulated entity designated by the ERC to serve end-users in the Contestable Market following a last resort supply event. A customer will be served by a SOLR in cases when the customer: (1) fails to exercise its option to choose its supplier of electricity upon the implementation of retail competition and open access; or (2) fails to find a willing Retail Electricity Supplier (RES) that is licensed to sell, broker, market or aggregate electricity to end-users.

Under the Rules, the distribution utility (DU) will serve as the SOLR for the Contestable Market in its franchise area in the early stages of retail competition and open access, which will run for two (2) years from open access date, unless otherwise determined by ERC. The SOLR must submit for ERC approval its proposed SOLR rate within sixty (60) days from receipt of notification from the ERC. Where a DU is qualified to act as SOLR outside its franchise area, its proposed SOLR rate must be filed and submitted to the ERC within three (3) months from having been qualified as such. The ERC will verify any over/under recovery of the SOLR’s recovery mechanism yearly within sixty (60) days from the submission of calculation.

“The Rules will guide and ease out the rate filing process for SOLR as it ensures a level playing field for all other similar entities to make the electric power industry move towards a brighter future,” Chairman Albano added.

Rules on Rate Filing by the Supplier of Last Resort

December 12, 2006