The frontward strategy of utility giant Manila Electric Company (Meralco) will be to start as retail electricity supplier (RES) within its franchise area before spreading out to other prospective markets.

“We will have to start as local RES, then from there, we’ll have to evaluate where we can expand further,” Meralco president Jose P. de Jesus said.

The Rules crafted by the Energy Regulatory Commission (ERC) prescribed that distribution utilities can act as local RES, and within this sphere, it no longer requires a license to operate as such.

The policy stipulates that a distribution utility shall serve as the supplier of last resort (SOLR) for the contestable market in its franchise area in the early stages of retail competition and open access, envisioned to be in place for two years from the declaration of open access by the ERC.

Those qualified to choose electricity suppliers will be referred to as “contestable market;” while the customers staying under the domain of the franchised distribution utilities are classified as “captive market.”