Firm Becomes Retail Electricity Supplier

Manila Bulletin
By MYRNA M. VELASCO
November 5, 2011, 1:02am


MANILA, Philippines — A newly-formed subsidiary of Cathay Pacific Steel Corporation (Capasco) has been granted a license to become a retail electricity supplier (RES) when the power industry finally reaches the yet-elusive open access and retail competition regime.


Ferro Energy Inc. is listed as the 16th retail electricity supplier that was given a license by the Energy Regulatory Commission. That is in the wake of recent setbacks that the open access era in the industry will be slipping again to a later timeframe.


Based on information it submitted to the regulator, Ferro Energy indicated that it “plans to supply the energy requirement of Capasco and its affiliates upon the commencement of RCOA (retail competition and open access).”


The company is also setting sights to eventually participate in trading at the Wholesale Electricity Spot Market.


In granting the firm’s bid for RES license, ERC chairperson Zenaida G. Cruz-Ducut noted that the addition of Ferro Energy in the growing list of prospective power suppliers “bodes well for our economy as it is an economic principle that true and healthy competition happens when there is a number of suppliers playing in the market.”


It must be culled that despite the 10 years of the restructured industry’s transitioning, the envisioned influx of power suppliers which would be able to give choice to the end-users has yet to turn into fruition.


On ERC’s part, Ducut pointed out that with the much-anticipated expansion of the base of power industry players, “we shall faithfully perform our oversight functions in the supply sector to ensure a level playing field and guard the electricity consumers against market abuse.”


The regulator emphasized that, based on its evaluation of Ferro Energy’s application, it was able to comply with all the requirements being imposed before any entity can be accredited as RES.


The company, it said, was able to conform with technical, financial and even management requirements being imposed on prospective players in the electricity sector’s retail segment.


Ferro Energy similarly submitted a five-year business plan which spells out its undertakings while engaging in the sale of electricity to prospective off-takers.


The official kick-off of the open access regime has recently been deferred anew by the ERC following the need for evaluation of key concerns which are within the policy latitude of the Department of Energy.


These shall cover the business-to-business (B2B) system that shall serve as the infrastructure for customer-switching, as well as the billing and settlements concern which will likely be assigned to the WESM operator or a third party entity.


The energy department has been sounding off at least a semester of delay, or until mid- to third quarter of 2012, but many in the industry are still skeptical with that targeted timeframe.