ERC grants license to Vivant unit

The Energy Regulatory Commission awarded a Retail Electricity Supplier (RES) license to Corenergy Inc, a unit of publicly listed Cebu-based Vivant Corp., which means it can now operate its retail supply business.

Corenergy is into buying, sourcing and obtaining electricity from generating companies or from the wholesale electricity spot market (WESM) to sell, broker, market or aggregate electricity to the endusers in the contestable market.

Corenergy aims to supply the power requirements of qualified industrial, manufacturing, and commercial customers in Luzon and Visayas, and eventually in Mindanao once the retail competition and open access (RCOA) is declared there. It plans to sell an initial capacity of 100 MW in the first year, which would account for 2.35 percent market share of the total contestable customer demand.

ERC is setting a shift to RCOA which allows qualified consumers to source their electricity supply from competing retail electricity suppliers.

Open access also allows them to use existing transmission and distribution systems as well as associated facilities but subject to the payment of ERCapproved rates.

Corenergy will procure power supply from a diverse mix of generation technology taking into account the dependability, costs implications, and location of these generation capacities, ERC said.

"In order to guarantee its obligations to its customers, it will be contracting 50 percent of the requirement from coal and hydro generator facilities. For its peaking requirement, it will be sourcing out from bunker technology. It also plans to source a portion of its energy requirement from the WESM to take advantage of the relatively cheap annual weighted-average cost of electricity. Lastly, to mitigate the impact of the sudden spike of prices in the WESM due to unplanned outages of power plants, Corenergy will also contract with a peaking plant that will act as a hedge against any sharp increase of prices in the WESM," ERC said in a statement.

Based on a resolution that the ERC adopted on May 12, electricity consumers using at least 1 MW will be required to source power from retail electricity suppliers starting December 26, 2016.

Starting June 26, 2017, ERC also mandates those consuming at least 750 kilowatts to also buy electricity from ERCcertified suppliers as the regulator moves the retail power market towards greater competition as called for by Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA).

For end-users with an average monthly peak of at least 750 kW and 1 MW for the preceding 12 months, the date for voluntary contracting of electricity is set on June 26, 2016.

This becomes mandatory on Dec. 26 for those consuming 1 MW, and on June 26, 2017 for those consuming at least 750 kW.

Vivant has diversified portfolio in the power generation, power distribution and retail electricity supply business.