19 new Meralco retail customers seeking WESM registration

by Myrna Velasco – June 8, 2016

from Manila Bulletin

Prior to the kick-off of mandatory retail competition and open access (RCOA) in the restructured electricity sector, the local retail electricity supplier (local RES) unit of Manila Electric Company (Meralco) managed to enlist additional 19 new contestable customers within the 750-999 kilowatts (kW) threshold of power usage.

This was disclosed to the media by the Philippine Electricity Market Corporation (PEMC) which is the operator of the Wholesale

Electricity Spot Market (WESM), that in turn is the duly designated central registration body for qualified retail customers or those end-users which can already exercise “power of choice” on their supply contracting and procurement.

Phillip C. Adviento, PEMC training and communications manager indicated that 20 new contestable customers are applying for registration with the spot market – the bulk of which or about 19 are with MPower, the local RES unit of Meralco.

He noted that the other contestable customer is an industrial end-user from the Subic Freeport zone.

“There are 20 contestable customers actually applying for registration for the 750 kWh threshold – 19 are MPower and one is from Subic,” Adviento said.

He explained that these contestable customers may still be able to register as new ones under the local RES of a distribution utility (DU) so long as the contracts would have been firmed up prior to the issuance of the Energy Regulatory Commission (ERC) resolutions dislodging the DUs from securing RES licensees and in continuing their local RES operations.

Local RES allowed DUs to continually supply and be in contract with contestable customers within their franchise areas.

In the newly crafted rules though, they have been mandated to stop from the venture and only their affiliates could register as retail electricity suppliers (RES) that will be competing with everyone else in the market within Luzon and Visayas grids.

The DUs were given three-year period to wind down their local RES business units – which means that they must already close shop by 2019.

“If the contracts were entered before the effectivity of the (ERC) resolutions, they (local RES of DUs) would still be allowed to register contestable customers,” Adviento said.

He further noted that most of the MPower contracts have more or less three-year duration, which he reckoned might have already anticipated the proposed winding down timeframe for the local RES segments of the distribution utilities.

The battle on whether retail competition will move forward or be stalled for the power sector has already been tossed to the Courts with the petition for declaratory relief earlier filed by Meralco seeking to nullify the ERC resolutions on the licensing and restrictions being prescribed for the retail power market.