ERC lauds Meralco move to register as retail supplier

By Lenie Lectura – November 3, 2016

from Business Mirror

THE Energy Regulatory Commission (ERC) hailed the recent pronouncement by the Manila Electric Co. (Meralco) that it will apply for the registration of an affiliated company as a retail electricity supplier (RES), in accordance with the government’s retail competition and open access (RCOA) policy in the power sector.

ERC Chairman Jose Vicente B. Salazar said Meralco’s move “underscores the power firm’s unwavering commitment to its customers and to the transformation of the electricity market in line with the spirit of the Electric Power Industry Reform Act [Epira].”

The registration of an affiliate distribution utility is a feature of the RCOA implementing rules issued earlier by the ERC.

The rules provide that no entity may supply power to the so-called contestable market without an RES license issued by the ERC. The rules also provide that existing local distribution utilities, like Meralco, may no longer supply electricity to end-users in this market unless this is done in their capacity as “suppliers of last resort” or by creating an affiliate with a duly-issued RES license.

The “contestable market” consists of customers within a certain level of electricity consumption and which are allowed to select their own power supplier. The ERC has also directed the inclusion of customers with average monthly peak demand of 1 megawatt  into the contestable market by the December 26 this year.

Meanwhile, customers with monthly peak demand of 750 kilowatts  will be included in this category by June 16, 2017.

Salazar said the ERC is now reviewing the timeline to give existing power distributors enough window to conform to the requirement.

The ERC policy, in effect, further expands the number of power customers who will benefit from the freedom to choose their RES. This also boosts the competition among RES in the power sector and which is seen as favorable to lowering the prices of electricity.

The Supreme Court (SC) earlier affirmed ERC’s RCOA guidelines. On October 10 the Court slapped a temporary restraining order (TRO) against an earlier injunction issued by the Regional Trial Court in City. The RTC in Pasig City order halted the implementation of the RCOA guidelines by the ERC.

Salazar said: “Meralco has once again displayed its tradition as a trailblazer in the country’s power industry when it took the step to back the implementation of this particular feature of RCOA.”

He earlier expressed confidence that the power-distribution sector will give its full support to the SC resolution backing the RCOA rules.

Salazar said the ERC has already approved a total of 23 applications for RES license.

Salazar added that Meralco’s move “hastens the journey of RCOA, which is designed to eventually reach the household level.”

“The goal here is to keep expanding the segment of the total market where retail electricity suppliers compete,” Salazar explained. “The 1-MW market is just our starting point, and we aim to eventually include even the large residential customers in the near future,” he