SN ABOITIZ Power-RES, Inc. expects a double-digit increase in the number of its retail electricity supply (RES) contracts next year as it looks forward to the resumption of rules that will allow suppliers to serve consumers under the 1-megawatt (MW) threshold.
“I’m pretty bullish on it [RES business]. It’s heavily based on the confidence I have on our team,” said Joseph S. Yu, president and chief executive officer of the SN Aboitiz Power (SNAP) group.
“I’m quite convinced that we will be able to carve out a very successful business for competitive customers,” he said.
Mr. Yu said the company’s RES business unit remains among the small players given the overall scope of the industry.
A total of 28 retail electricity suppliers are currently competing for a piece of the “contestable” market made up of 862 customers whose consumption has reached an average of at least 1 MW for the past year.
Aside from competing among themselves, the retail electricity suppliers are also competing with 12 “local” RES, or the retail supply businesses of distribution utilities that serve their respective franchise areas.
For now, the temporary restraining order (TRO) issued by the Supreme Court put on hold rules on retail competition and open access (RCOA) and prevented the contestable market to expand and include the next level in the threshold — the 750 kilowatt (kW)-999 kW customers. This left players competing tightly to hold on to their 1-MW customers.
“We’re looking forward to when the TRO is eventually lifted and resume open competition for the contestable customers,” Mr. Yu said.
He declined to disclose the company’s latest contracted capacity, although he admitted that is probably among those in the bottom.
“I just looked at the performance of our sales team … Despite the fact there is a TRO, they made a lot of progress in the 1-MW-and-up [market segment],” Mr. Yu said.
As of June, the industry was dominated by the local RES of Manila Electric Co., which had a 31% share in the number of contracted contestable customers. SNAP affiliate Aboitiz Energy Solutions, Inc. had a share of 18%.
“I believe that the guys that we have on the ground and the way they’re approaching the market is actually the right way of doing it,” Mr. Yu said. — VVS
