Ayala unit sees steady flow of ‘contestable’ customers

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By Victor V. Saulon

AYALA-LED AC Energy, Inc. has started supplying electricity to customers with an average monthly consumption of at least 750-kilowatts (kW) for the past year, moving forward the government’s goal of cutting power prices through greater retail competition.

“We’re happy to note that there has been a steady flow of ‘phase 2’ customers who are now able to enjoy competitive rates from retail suppliers,” said Eric T. Francia, AC Energy president and chief executive officer, via e-mail.

He said the company was able to serve the 750-kW customers who are able to obtain a certificate of contestability from the Energy Regulatory Commission (ERC).

The second phase of the rules on retail competition and open access (RCOA) allows a retail electricity supplier (RES) to sell directly to “contestable” customers with a smaller power consumption.

The first phase limited the qualified customers to those using an average of at least 1-megawatt (MW) in the past year. Contestable customers have the power to buy electricity directly from a RES and away from a distribution utility, which previously served them as captive customers.

Provisions of the RCOA rules had been questioned before the Supreme Court by some sectors, including educational institutions, stalling the full implementation of the regulation, which is called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

The high court issued a temporary restraining order on the implementation of the crucial provisions of RCOA, including the lowering of the threshold to 750-kW and the issuance of new licenses to retail electricity suppliers.

The Department of Energy (DoE), however, issued a circular to make the RCOA rules “voluntary,” skirting the mandatory requirement of the rules that were questioned before the Supreme Court.

Retail electricity suppliers were initially hesitant to sell to those consuming power below the 1-MW threshold, but based on AC Energy’s response, contestable customers are now being certified by the ERC as required under RCOA rules.

David Mikel Aboitiz, manager for market strategy at Aboitiz Power Corp., earlier said in an interview that the company had started supplying to the 750-kW customers.

“There have been some 750 kW and above customers, right below the 1 MW between where it is, that have been able to sign up. I’m not sure exactly where it stands at the moment in terms of [them] being able to get those certificates of contestability,” he said.

“I believe that we’ve demonstrated ourselves since the beginning of open access that we’re able to secure those clients, regardless if it’s 1 MW or a hundred. We treat everybody the same,” he added.

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.