Meralco retail-supply unit to be licensed -- ERC

http://www.bworldonline.com/content.php?section=Corporate&title=meralco-retail-supply-unit-to-be-licensed----erc-&id=129710

 THE Energy Regulatory Commission (ERC) has given its assurance that Manila Electric Co. (Meralco) will be granted a license to operate as a retail electric supplier (RES) if this function is performed through an affiliate company.

“Assuming they will form an affiliate...and the creation of this affiliate will be in conformity with our rules, then we will definitely grant the license,” ERC Chairman Jose Vicente B. Salazar said in a recent interview.

He made the statement against a backdrop of the imminent expiry of a temporary restraining order (TRO) granted by a Pasig City Regional Trial Court to Meralco, which questioned resolutions issued by the ERC on retail competition and open access (RCOA) for the power industry.

“Supposedly it [TRO] ends just before the end of the month...and we anticipate that by the 30th of the month [June], there should be an injunction or if they don’t get it, it means that we can move forward with the rules that we issued with RCOA,” Mr. Salazar said partly in Filipino.

In one of its issuances, the ERC has directed so-called “local RES” to wind down their business within three years from the effectivity of the resolution, while telling them to no longer sign or execute any retail supply contracts. Meralco serves as a local RES within its franchise area under a separate unit called MPower.

Meralco had insisted that Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, and its implementing rules and regulations, do not require the company to set up an entity that is licensed by the ERC.

“We are just following what is being undertaken in other countries that when you participate as a RES there has to be no conflict of interest,” he said. “So nobody can have a dominant position in the market. Nobody will be able to abuse its dominant position in the market.”

Meralco has refrained from commenting on the issue, citing ongoing court proceedings.

“I guess the way to manage this is maybe the discussion can continue. There are periods within which we will implement certain provisions of the law. I was hoping that the injunction would not be issued so that while we are implementing the rules, we will have this continuous discussion with the industry players,” Mr. Salazar said.

“But that never happened. What happened was there was a TRO. But of course there’s still an opportunity for us to explain to the court that the only tribunal that can actually decide this matter is the Supreme Court,” he added. -- Victor V. Saulon