AC Energy Holding eyes retail energy business

MANILA, Philippines – AC Energy Holdings Inc. is dipping its foot in the retail energy business, initially targeting a 50-megawatt (MW) supply in the next three years in line with the full implementation of retail competition and open access (RCOA).

The Ayala power investment arm has established itself as a retail electricity supplier (RES) after getting the necessary license, AC Energy president and CEO John Eric Francia said.

“While we are small and I don’t think it would be significant, it’s worth mentioning we’re also going to be an active participant in retail electricity,” he said.

AC Energy does not intend to grow aggressively in the space, targeting to supply 50 MW at most in three years, the company official said.

“We’re not going to be big in the near term. This is just to get to know the business, we want to start serving some key customers. it will be on an opportunistic, case to case basis,” Francia said.

AC Energy will complement the existing RES firms of the Ayala Group under Ayala Land Inc.

Ayala Land’s RES – Direct Power and Ecozone Power Management Inc. – focuses on its own captive market while AC Energy will focus on the broader market outside the Ayala Group, Francia said.

Under the RCOA regime, end-users that are part of the contestable market, or contestable customers, are given the choice to choose their supplier of electricity aimed to foster competition in the generation and supply sector.

Originally, mandatory contestability for customers with peak demand of one MW is scheduled on Dec. 26, 2016 but this will be subject to change after legal hurdles for the implementation of the RCOA scheme.

Earlier, Manila Electric Co. (Meralco) sought court relief to stop the implementation of new RCOA rules, particularly distribution utilities (DUs) are not allowed to become a RES, requiring all DU-related local RES to wind down their businesses in three years or until expiration of their respective retail supply contracts (RSCs).

A local RES is defined as entities under a distribution utility (DU) that may engage in the business of supplying electricity to the contestable market without need of obtaining a license from the ERC.