Meralco creates new unit to retail electricity

MANILA, Philippines - Manila Electric Co. (Meralco) has applied for a retail electricity supplier (RES) license to be able to continue its participation in the retail electricity market as part of compliance with the new retail competition and open access (RCOA) rules it earlier opposed.

Meralco has formed a subsidiary called Vantage Energy Solutions and Management Inc. intended to retail electricity to contestable customers, or end-users who are given the choice to choose their supplier of electricity aimed to foster competition in in the generation and supply sector.

In a disclosure to the Philippine Stock Exchange, the power distributor said Vantage Energy filed an application for a RES license with the Energy Regulatory Commission (ERC) on Nov. 29.

“As a distribution utility (DU) affiliated RES, Vantage Energy intends to provide retail energy services which will include wholesale contracting, energy trading and sourcing, marketing, selling and aggregating electricity, billing, collection and the provision of other value added services to contestable customers,” Meralco said.

Contestable customers with peak demand of one megawatt are required to get their electricity supply from RES effective Feb. 26, 2016. For customers with at least 750 kilowatt (kw) demand, mandatory contestability is scheduled on June 26, 2017.

Earlier, officials of the power distributor said they are obtaining a license to put up an affiliate RES after the Supreme Court thumbed down Meralco’s case with a regional trial court to stop the implementation of new RCOA rules.

Under the new rules, all DUs are now required to wind down their local RES in three years and apply for a RES license to be able to serve the contestable market.

This removes the DUs’ luxury of not having to secure a license to operate a RES, which Meralco claimed was not in accordance with the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

Currently, Meralco has a local RES called MPower, which accounts for about 50 percent of the market share of the contestable market within its franchise, or 18 percent of the total nationwide.