Meralco looking to put up RES affiliate for RCOA regime


The Manila Electric Co. (Meralco) is looking to establish an affiliated retail electric supplier after the Supreme Court junked its case to stop the implementation of the new retail competition and open access (RCOA) rules.

“We are examining the legal remedies that we can explore and our comment is due on the 29th of this month,” first vice president and regulatory management head Ivanna dela Pena said.

Meralco is considering getting a RES license and form an affiliate separate from its current local RES MPower to meet current contestable customers.

“We are also exploring the possibility of [putting up an] affiliate RES because that is allowed under the rules that have been issued by the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) so that is one way we are taking as well,” dela Peña added.

The power distributor company believes that it provides is customers the power of choice – the goal of the RCOA – Meralco SVP and customer retail services and corporate communications head Alfredo Panlilio said.

“We are providing an environment where there is customer choice and competition because if you limit players in the market, and you mandate customers to do a certain way then it doesn’t open a competitive market,” he said.

Meralco recently sought for court relief following the government’s issuance of new RCOA rules, which, according to the company, not in accordance with the implementing rules and regulations of the Electric Power Industry Reform Act.

The new rules implemented required all RES to obtain a license to operate and ordered to wind down all local RES operations in three years. Local RES are entities under a distribution utility that supply electricity to the contestable market without the need of a license from the Energy Regulatory Commission.

Meralco has opposed to these new rules as their local RES will be affected. MPower has about 50% of market share of the contestable market in the franchise, or 18% nationwide.

The Pasig Regional Trial Court has sided with Meralco, stopping the ERC and the Energy Department from enforcing the rules. However, a temporary restraining order was issued last October 10 by the SC enjoining the Pasig RTC and Meralco from blocking the RCOA implementation.

Under RCOA, end-users who are part of the contestable market have a choice of electricity suppliers to foster competition in the generation and supply sector.

The ERC said that they will work on a new timeline for the mandatory contestability following the favorable SC decision on the RCOA implementation.