OFFICIALS of distribution utility Manila Electric Company (Meralco) said many companies are now expecting the full implementation of open access and retail competition next year and may not be interested in the Power Supply Option Program (PSOP) of the government.

Ivanna Dela Pena, Meralco vice president and head of utility and economics, noted that the impending implementation of open access by January next year will invalidate all the contracts entered under PSOP.

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Under PSOP, consumers are allowed to choose their electricity suppliers.

Like Dela Pena, Meralco first vice president and treasurer Rafael Andrada is also not enthusiastic on the PSOP.

Andrada said: “If there were about six months left (for open access to be implemented), would you still invest? I am sure that with the recent performance at the wholesale electricity spot market, customers may find it difficult to find suppliers.”

According to Dela Peña, power generation companies may even find it more beneficial to sell through the wholesale electricity spot market (WESM) due to higher prices in the market compared to signing individual contracts under the PSOP.

She added that even their eligible customers for the program are mostly enjoying lower ecozone rates and would unlikely shift to PSOP.

So far only one customer inquired about the program.

The Energy Regulatory Commission (ERC) signed the PSOP program last month and took effect last March 4.

This program will be available to Luzon grid electricity consumers with a monthly average peak demand of 1 megawatt (MW) for the 12 months preceding the implementation of the said program.

Moreover, Dela Pena said PSOP will no longer be necessary at this time when the Power Sector Asset and Liabilities Management (PSALM) Corp., is only waiting for the privatization of the independent power producer contract of the 1,200-MW Ilijan natural gas power plant, before it can implement full open access.

Based on the Electric Power Industry Reform Act of 2001 open access and retail competition could be implemented if five requirements can be met.

Four of the five requirements have been completed starting with the establishment and commercial operation of the wholesale electricity spot market (WESM), the approval of unbundled transmission and distribution wheeling charges, the implementation of the cross-subsidy removal scheme, the privatization of 70 percent of National Power Corporation’s Luzon and Visayas capacities.

The government is now nearing the completion of the transfer of 70 percent of Napocor capacity covered by independent power producer contracts to IPP administrators (IPPAs).

Meralco has more than four million customers in its franchise area. (MSN/Sunnex)