January 3, 2019 | 12:03 am
AYALA-LED AC Energy, Inc. is looking
at its retail electricity supply (RES) unit as a long-term business whose
growth in the near term is meant largely to establish a respectable customer
base, its top official said.
“We don’t want to grow for growth’s
sake because this is a long-term business. I don’t think anyone is making money
on RES. It’s really more of acquiring the customers and hope to build a long-term
relationship base with that,” AC Energy Chief Executive Officer Eric T. Francia
told reporters.
“It’s still a competitive market out
there,” he said. “So to us, when we started this business, we wanted to
establish our base.”
Mr. Francia said to be a “respected”
player in retail electricity supply, one must have a minimum scale of power
sales and a “good customer base.”
“I think 100 megawatts (MW) is a
good size,” he said. “[It] puts us in the top five or six players. So it’s a
good position especially if you combine it with the rest of the Ayala group.
We’re probably the third or fourth largest as a group. So that’s a good
position.”
The RES business is governed by
rules on retail competition and open access (RCOA), which calls for contestable
customers to move away from being part of the captive market of a distribution
utility. These are customers whose electricity consumption for the past 12
months has reached the threshold set by the Energy Regulatory Commission (ERC).
RCOA rules have been questioned by
some sectors. The resolution of a court case on the matter remains pending with
the Supreme Court. For now, retail electricity suppliers are competing to
corner a bigger share of the 1-MW contestable customers, which are not covered
by the temporary restraining order issued by the court.
The switch to a licensed retail
electricity supplier is meant to allow greater participation from new players,
thus spurring competition and lowering power costs. RCOA is called for under
Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001
(EPIRA), the law that restructured the power sector.
Based on data from the ERC, AC
Energy is one of three Ayala-led companies in the RES business. The other two
are Ecozone Power Management, Inc. and DirectPower Services, Inc.
As of September 2018, AC Energy had
a total of 71 customers with a total consumption of 106.43 MW, taking the lead
for the Ayala group ahead of Ecozone Power’s 102.40 MW and DirectPower’s 95.93
MW.
As group, the Ayala companies have a
combined market share of 10.6%, trailing Manila Electric Co.’s 31.56% share
from its three RES units and the Aboitiz group’s 19.67% from five different
entities.
“One of our focus is to retain and
keep our customers satisfied and then we will be happy to win new customers.
But we’re not very aggressive in getting others and dropping price. That’s not
our strategy,” Mr. Francia said. — Victor V. Saulon
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