Supply Sector

Suppliers can sell, broker, market or aggregate electricity to end-users. Except for distribution utilities and electric cooperatives with respect to their existing franchise areas, all suppliers of electricity are required to secure a license from the ERC. However, the prices to be charged by suppliers for the sale of electricity to the market shall not be subject to regulation by the ERC.

Supply of electricity means the sale of electricity by a party other than a generator or a distributor in the franchise area of a distribution utility using the wires of the distribution utility concerned.

First Gen, through its subsidiary First Gen Energy Solutions, is an ERC-licensed Retail Electricity Supplier (RES). Operations of the RES will start when retail competition commences.

Once retail competition and open access are implemented as mandated by the EPIRA, end-users with electricity demand within the thresholds set by the ERC will be allowed to source electricity from suppliers of their choice. The EPIRA allows eligible end-users to directly source power through the WESM or enter into contracts with generation companies.

In May 2008, industry participants led by the Philippine Independent Power Producers Association (PIPPA), Meralco, Visayan Electric Company (VECO), Davao Light & Power Co. (DLPC) and other distribution utilities, filed a petition before the ERC seeking approval for the Interim Open Access (IOA) in the Luzon and Visayas grids. The IOA is the industry response to the increasing clamor for lower electricity rates and the delay in the implementation of the Retail Open Access. The IOA scheme is designed to give large consumers with at least an average monthly peak demand of 1 MW, the power to choose their suppliers. Thus instituting greater competition among industry players.