ERC Enlisting Additional Power Retailers

Manila Bulletin

By MYRNA M. VELASCO

July 31, 2012, 5:15pm

MANILA, Philippines — The retail power segment is the next exciting phase in the restructured electricity sector, thus, the Energy Regulatory Commission (ERC) has been stepping up its accreditation of additional electricity suppliers.

The latest firm to be enlisted as retail electricity supplier (RES) is PRISM Energy Inc., technically an affiliate of Visayan Electric Company (VECO) because it is owned jointly by the Aboitiz and Garcia groups.

The ERC has noted that PRISM intends to capture “60 percent of the contestable customers of VECO” – or the customer bracket which will already be given the power to choose their electricity suppliers based on the 1.0-megawatt peak demand initial threshold set for open access ad retail competition in the power industry.

VECO serves the electricity needs of the Metro Cebu area, primarily the cities of Cebu, Mandaue, Talisay and Naga as well as the municipalities of Liloan, Consolacion, Minglanilla and San Fernando.

While open access will already allow customers to contract with or purchase supply from their preferred power providers, VECO will still be paid with charges on the use of its wires – it being a natural monopoly and something that cannot just be duplicated in a power system.

The company already identified at least 19 plants as its potential supply sources, albeit it reckoned that “it will capitalize on the experience of DUs (distribution utilities) and generation companies which are also subsidiaries of Aboitiz Power and Vivant. Both Aboitiz Power and the Garcia’s Vivant Power Corporation are engaged in power generation segment of the industry.

The competitive regime in the industry will require them though to be “extra innovative” both in their service offers and prices so they can corner continued customer patronage.

Another Aboitiz-led RES firm, AdventEnergy, was granted license renewal by the power industry regulator.  It will be the retail electricity supplier arm of the Aboitiz group that will cater to contestable customers operating inside special economic zones.

For both RES-licensed energy firms, ERC chairperson Zenaida G. Cruz-Ducut noted that they have met all financial as well as corresponding technical and other requirements to be enlisted for such business purpose.

She has reiterated that the ERC will continue to monitor all the activities of the RES to ensure that they are adhering to the terms and conditions of their licenses, primarily in having their “technical and financial fitness to ensure that (their) customers’ needs will be served in accordance to set standards.”    source