The Energy Regulatory Commission (ERC) approved, on 09 January 2012, the
granting of a Retail Electricity Supplier (RES) License to Kratos RES,
Inc. (Kratos, for brevity). The RES license makes Kratos the 16th
licensee in the Philippines allowed to engage in the selling, brokering,
marketing and aggregating of electricity to qualified consumers in the
contestable electricity market. A RES license is valid for 5 years, is
non-transferable, and must be renewed at least 60 days prior to the
expiration of the current license.
Kratos was registered in the Securities and Exchange Commission (SEC) on 05 August 2011 as a private corporation wholly-owned by Primewater Infrastructure Corporation. It is authorized by the SEC to engage in the purchase, supply and delivery of electricity, and other electricity services. It plans to supply electricity to eligible commercial and industrial end-users within the Vistaland and Starmall Group of Companies upon commencement of open access and retail competition. Kratos will source power from privatized NPC asset owners, from bilateral contracts with Independent Power Producers (IPPs), new generation companies and the WESM (Wholesale Electricity Spot Market).
Kratos, after inspection, evaluation and assessment of submitted requirements by the ERC, was found to have the technical, managerial and financial capabilities required of a RES. The evaluation was based on the standards set in the "Revised Rules for the Issuance of Licenses to Retail Electricity Suppliers”. Kratos also submitted a sound business plan, initially to supply up to 62 MW of the energy requirements of contestable customers. Kratos exhibited the ability to set up a business-to-business (B2B) system and the organizational, technical and financial stability to enter into transactions and interconnection arrangements with the distribution utilities (DUs), the transmission network operation and the Market Operator.
Any of the following can apply for a RES license: (1) a generation company or its affiliate; (2) a DU that will operate as a RES outside of its franchise area or an economic zone supplier that will operate outside of the economic zone; (3) an affiliate of a DU with respect to the latter’s contestable market or outside its franchise area; (4) an independent power producer (IPP) administrator; or (5) any person who intends to sell, broker or market electricity to the contestable market.
Upon the commencement of open access and retail competition, the end-consumers with an average monthly consumption of at least 1 MW for the preceding 12 months will have the power to exercise their choice of electricity supplier. The threshold will be lowered to 750 MW after two years. The ERC will thereafter annually review the situation in the electricity market and when warranted, the threshold will be gradually lowered until it eventually reaches the household demand level.
"The entry of Kratos as the 16th PH RES bodes well for the country’s economy as more players in the contestable market means better competition which leads to better customer service,” ERC Chairperson and CEO Zenaida G. Cruz-Ducut said. <erc.gov.ph>