The Energy Regulatory Commission (ERC) welcomed the announcement by the Manila Electric Company (Meralco) on Wednesday 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 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.
According to the rules, 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 one megawatt (MW) into the contestable market by the 26th of December this year.
Meanwhile, customers with monthly peak demand of 750 kilowatts (kW) 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 time to conform to the requirements.
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 is expected to lower the price of electricity.
The Supreme Court (SC) had earlier backed ERC’s RCOA guidelines. Last October 10, the High Court slapped a Temporary Restraining Order (TRO) against an earlier injunction issued by the Pasig Regional Trial Court. The Pasig RTC order halted the implementation of the RCOA guidelines by the ERC.
According to Salazar, 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.” The ERC head earlier expressed confidence that the power distribution sector will give its full support to the SC resolution backing the RCOA rules.