Energy Regulatory Commission (ERC) approves the issuance of a Retail Electricity Supplier’s (RES) license to Ferro Energy Incorporation

ERC issues a RES License to Ferro Energy

The Energy Regulatory Commission (ERC) approved on 10 October 2011 the issuance of a Retail Electricity Supplier’s (RES) license to Ferro Energy Incorporation (Ferro) after an evaluation revealed Ferro’s compliance to the: (i) technical and managerial resource capability; (ii) Setting up and operating a B2B (computerized telecommunications-based business to business) system; (iii) financial capability; and (iv) Five-year business plan requirements set forth in the ERC’s Guidelines for the Issuance of Licenses to Retail Electricity Supplier’s (RES) promulgated in 2005 (as revised in 2011). A RES is an entity authorized to sell, broker, market or aggregate electricity to contestable market customers in a regime of retail competition and open access (RCOA) in the Philippine electric power industry. Upon the initial implementation of open access, the ERC shall allow all electricity end-users with a monthly average peak demand of at least one megawatt (1MW) for the preceding twelve (12) months to be the contestable market. Two (2) years thereafter, the threshold level for the contestable market shall be reduced to seven hundred fifty kilowatts (750kW Subsequently and every year thereafter, the ERC shall evaluate the performance of the market. On the basis of such evaluation, it shall gradually reduce threshold level until it reaches the household demand level.

A RES license must be secured from the ERC before engaging in the retail electricity supply business. To qualify for a license, a RES must be technically competent and financially capable of running an electricity supply business. A RES must also prove its creditworthiness.

The following can qualify to be a RES: (1) a generation company or its affiliate; (2) a distribution utility (DU) serving the contestable market outside of its franchise area; (3) an affiliate of a DU; (4) an Independent Power Producer Administrator (IPPA); or (5) any person authorized by the ERC to provide retail electricity service.
Ferro Energy is a newly-organized private corporation wholly-owned by Cathay Pacific Steel Corporation (CAPASCO). It plans to supply the energy requirement of CAPASCO and its affiliates upon commencement of RCOA. Ferro envisions to eventually participate in the Wholesale Electricity Spot Market (WESM).

"Ferro Energy Incorporation is the 16th RES in the country.  This bodes well for our economy as it is an economic principle that true and healthy competition happens when there is a good number of suppliers playing in the market.  Trust that the ERC will strive to create and maintain a stable and investor-friendly regulatory environment for the benefit of the electricity consumers.   We shall faithfully perform our oversight functions in the supply sector to ensure a level playing field and guard the electricity consumers against market abuse,” ERC Chairperson and CEO Zenaida G. Cruz-Ducut promised. - https://www.affordablecebu.com/