Meralco forms RES subsidiary

by Lenie Lectura
01 December 2016 from Business Mirror

THE Manila Electric Co. (Meralco) has established a subsidiary that will serve as its retail electricity supplier (RES).

The utility firm said on Thursday it filed an application for RES license on November 29 with the Energy Regulatory Commission (ERC).  Its RES unit shall be known as Vantage Energy Solutions and Management Inc.

“As a distribution-utility affiliated RES, Vantage Energy intends to promote retail-energy services, which 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 [CCs],” Meralco said in a disclosure to the stock exchange.

Meralco had said filing an RES license application was one of the options being considered, following  the temporary restraining order (TRO) issued by the Supreme Court (SC) on October 10 prohibiting all orders, resolutions and decisions rendered by a Regional Trial Court in Pasig City.

Meralco filed with the same local court a TRO and/or writ of preliminary injunction against the issuances of the Department of Energy (DOE) and the ERC, particularly assailing Sections 2 and 3, Article I of the 2016 Revised Rules Governing the Issuances of Licenses to RES and Prescribing the Requirements and Conditions therefor; the Revised Rules for Contestability; and, the Resolution Imposing Restrictions on the Operations of Distribution Utilities and RES in the Competitive Retail Electricity Market.

On July 13 the same court granted Meralco’s petition. The ERC and the DOE filed their respective petitions for certiorari and prohibition before the SC. Later on, the SC acted on DOE’s petition.

Aside from filing a RES license application with the ERC, Meralco said then it was also looking at “examining the legal remedies,” possibly filing for an appeal, considering the TRO that has been issued.

When sought for comment if Meralco was still pursuing this, Meralco Senior Vice President Alfredo Panlilio, in a text message, said “legal procedure still ongoing.”

Based on the rules, an end-user with an average monthly peak demand of at least 1 megawatt (MW) is mandated to enter into a retail supply contract (RSC) with an RES by its mandatory contestability date of December 26. The deadline, however, was later moved by the ERC to February 26, 2017.

Subsequently, an end-user with an average monthly peak demand of at least 750 kilowatt (kW) is mandated to enter into an RSC with a RES by its mandatory contestability date of June 26, 2017.

The lowering of the threshold to cover an end-user with an average monthly peak demand of at least 500 kW is set on June 26, 2018, subject to the review of the performance of the retail market by the ERC. 

The ERC has also decided CCs who fail to finalize an RSC with an RES shall have the option to be served by the distribution utility as a supplier of last resort.

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