ENERGY Regulatory Commission (ERC) Chairman Jose Vicente B. Salazar assured the Manila Electric Co. (Meralco) it would get a “fair treatment” should it decide to form an affiliate and have this registered as a retail electricity supplier (RES) with the commission.
“We’re not preventing Meralco from forming or creating an affiliate to undertake the business of an RES. Assuming that they will form an affiliate, and the creation will be in conformity with our rules, then we will definitely grant a license. There should not be any problem,” Salazar said. Under new rules, the enforcement of which was temporarily stopped by the Regional Trial Court (RTC) in Pasig City, the distribution utilities (DUs) are given three years, or until 2019, to wind down their local RES business units.
MPower is Meralco’s local RES. It supplies power to contestable customers, those with a monthly average peak demand of at least 1 megawatt, within Meralco’s franchise area.
The new rules further state that all DUs must form an affiliate and have this registered as a RES with the ERC. Once signed up, this RES would compete with everyone else in the market within Luzon and the Visayas.
“Meralco can still be involved, but not directly as a local RES. They could be involved in the supply market through an affiliate,” Salazar said.
The ERC chief said this setup is already being implemented in other countries. “We are just following what has been undertaken in other countries. When you participate as a RES, there should be no conflict of interest. In other countries, such as the UK, Australia, New Zealand and even Singapore, the business of distribution and supply are totally separate. The way they do that is to impose stringent rules on the operation of their business,” he said.
Meanwhile, the ERC, through the Office of the Solicitor General, argued the RTC has no jurisdiction over the case, saying only the Supreme Court has the power to restrain or enjoin the implementation of the provisions of the Electric Power Industry Reform Act of 2001.
