The Philippine National Oil Company (PNOC) is entering the retail electricity supply (RES) industry, targeted to cater to the power needs of government agencies across the country.
In a report by the Manila Bulletin, PNOC President and CEO, Oliver B. Butalid, disclosed plans for the company’s push into the RES business, emphasizing its intention to exclusively serve government agencies, steering clear of competition with private RES providers.
Butalid highlighted that negotiated tariffs under RES supply arrangements typically offer lower rates than the blended rates from franchised distribution utilities.
Moreover, by servicing government facilities, PNOC anticipates a revenue boost due to the considerable scale of operations and extensive network of government buildings throughout the country.
While many government entities qualify as ‘contestable customers’ under the Retail Competition and Open Access (RCOA), they often lack awareness of this status. Contestable customers can negotiate electricity supply contracts directly with preferred providers, aligning rates with their budgets.
As a RES provider for government agencies, PNOC asserts its advantage in comprehending State-driven procurement protocols and systems. Butalid stressed the complexity faced by government agencies in navigating RES procurement processes, citing intricacies and variability in supply rates compared to private sector dealings.
He highlighted PNOC’s unique capability in agency-to-agency transactions, enabling the company to serve as a RES while securing a captive market within the government sector.
Initial estimates by PNOC project a substantial power demand, potentially reaching 65 megawatts solely from government buildings in Metro Manila.
Butalid underscored the company’s intent to aggregate this demand, enabling negotiations with various power plant types to secure competitive rates, benefiting the government with a cost-effective electricity supply.