ERC: Meralco to lose customers

by Alena Mae S. Flores – September 11, 2016 at 11:59 pm

from Manila Standard Today

The Energy Regulatory Commission said power retailer Manila Electric Co. risks losing customers because of its opposition to the retail competition and open access regime.

ERC commissioner Alfredo Non said the regulator was hoping Meralco would reconsider its position on RCOA.

“I cannot understand why distribution utilities like Meralco would oppose change. The longer they wait or the longer they have the [court] injunction, the longer they cannot participate in the CREM [competitive retail electricity market],” Non told reporters.

RCOA allows large power users to choose their own power suppliers. The entry of more suppliers under a competitive retail market is seen to reduce power rates.

Meralco filed a case before Pasig regional trial court branch 157 stopping the implementation of open access, saying it was not required to get a retail electricity supplier license with ERC.

Non said Meralco faced the risk of losing its market as other retail electricity suppliers were now getting their licenses from the commission.

He said the injunction filed by Meralco against ERC was to the power retailer’s disadvantage.  “If this takes four years…and the other RES that we were given licenses are able to cover the other contestable customers, they [Meralco] will lose customers,” he said.

Non said ERC held talks with Meralco officials led by president Oscar Reyes and senior vice president Al Panlilio on the matter, with the hope of coming up with a resolution on the matter.

Non said other members of the Retail Electricity Suppliers Association opted not to participate in the suit filed by Meralco.

ERC through the Office of the Solicitor General filed a petition for certiorari and prohibition with the Supreme Court raising the issue of Pasig RTC’s jurisdiction of the case filed by Meralco.

The local court previously ruled in favor of Meralco and enjoined the Energy Department from implementing and enforcing the DOE circular DC 2015-06-0010 and ERC from implementing and enforcing its ERC Resolution No. 10 Series of 2016 and ERC Resolution No. 11 Series of 2016 “as they prohibit DUs [distribution utilities] from engaging in the supply business, impose market and other restrictions specified therein, and require mandatory contestability.”

ERC earlier said Meralco “had all the chance and opportunity to mitigate probable losses by virtue of the implementation of the RCOA.”

The regulator said Meralco knew since 2006 of the imminent transition from the captive market to the contestable market where customers can choose their own suppliers as these underwent public consultations.

ERC said the obvious consequence of the migration of the customers “is the change in the amount of profits it [Meralco] will earn, which by the way is not guaranteed even under its franchise.”

It said Meralco had sufficient time to set up its own retail electricity supplier-distribution utility affiliate.

ERC said Meralco was not prevented from putting up its own retail electricity supplier and as a distribution utility it would still continue participate in the contestable market as supplier of last resort.