50 Veco consumers qualify for power retail competition

With retail competition in the electricity market officially started in June, at least 50 large customers of the Visayan Electric Company (Veco) have already qualified as “contestables” or power consuming clients who can choose their energy source mix.

The retail competition in the electricity market is made possible through the government’s open access scheme to make the power generation sector more competitive, said Ricardo Lacson Jr., Veco’s vice president for administration and customer service group, during yesterday’s Power 202 briefing at the Veco office in barangay Banilad, Cebu City.

“The retail competition was recently started in June 26 this year for both Luzon and Visayas, and there are 200 customers that have already qualified and are called ‘contestables,’”

Lacson said.

According to the Energy Regulatory Commission, Open Access will allow these “contestables” to access the electricity highway composed of the transmission grid of the National Grid Corp. of the Philippines and the distribution wires of distribution utilities like Veco and Manila Electric Co.

Lacson said 50 large companies in Cebu that are qualified as “contestables” consume at least 1 megawatt (MW) of power every month for the last 12 preceding months.

Veco’s franchise area covers as far as San Fernando town in the south of Cebu and Liloan town in the north.

Sebastian Lacson, Veco chief operating officer, said these companies include the major malls like SM City Cebu, Ayala Center Cebu; and manufacturers and industrial customers like Cemex, San Miguel Brewery.

“The first phase will allow those consuming at least 1 MW of power a month and within the next three to four years, they are looking at going down to those consuming 750 kilowatts. In 10 years, it should go down to the residential consumer level,” said Lacson referring to those who can qualify for the electricity retail competition.

The retail competition currently does not include the Mindanao area because of certain conditions under the Epira Law that have not yet been satisfied, said Lacson.

Under the new scheme, Lacson said there are four types of suppliers authorized to offer Retail Competition services to customers. These include Local Retail Electricity Supplier (RES), Supplier of Last Resort (SOLR) and direct to a Wholesale Electricity Spot Market member.

“Veco like other distribution utilities has local RES which is allowed to offer Retail Competition to customers within the franchise area. At present there are over 10 local RES and 18 RES within Luzon and Visayas,” VP Lacson said.

Impact

Lacson said the scheme allows customers to handpick their power mix according to their preference.

“This one benefits more those customers with a good load factor which means they have a stable load requirement over a long period of time because it allows them flexibility in choosing their mix. They can buy power when the price is very low,” Lacson said.

Once available to the residential consumers, Lacson said, that the customers can now have a free hand to choose which electricity supplier or source they want to buy power from.

“With that, we foresee a growth in demand for technologies that are more cost efficient which as of now is coal because people will always want something that’s always available at lower cost,” Lacson said.

Energy Mix

Veco currently has five major sources of power which include Green Core Geothermal Inc. (GCGI), Cebu Private Power Corp. (CPPC), Cebu Energy Development Corp. (CEDC), the Power Sector Assets and Liabilities Management Corp. (PSALM), and the Wholesale Electricity Spot Market (WESM).

CEDC provides for majority of Veco’s power requirement with 29.8 percent, followed by GCGI with 29.3 percent, PSALM with 29.1 percent, WESM with 6.7 percent and CPPC with five percent.

Majority of their power is geothermal (52.5 percent), followed by coal (36.8 percent), mix sources (6.7 percent) then five percent from bunker.