Not taking any chances of getting toppled from its current position as dominant electricity provider, utility giant Manila Electric Company (Meralco) takes another step forward with its planned foray as retail electricity supplier.

Meralco Chairman and Chief Executive Officer Manuel M. Lopez clearly set out the company’s direction, when he said that “we stand by our earlier decision to enter into retail electricity supply with the Power Supply Option Program likely to be implemented next year.”

Evidently, the company is steadfastly preparing for the advent of open access, or the regime that will finally open up the deregulated power industry into a competitive setting. This will kick off with the big-ticket users, like industries, which will finally have that once-elusive choice on getting their preferred electricity suppliers.

The wires business is a regulated monopoly, so Meralco can sit comfortably with its revenue stream from that. This will be complemented by the service it has to continually provide to captive customers or those end-users with consumption of less than 1 MW which will not be able to gain “supplier choice” at the introductory phase of open access – primarily commercial and residential users.

To qualify as RES, Meralco will need to file its registration with the Energy Regulatory Commission (ERC). RES licensees, which are generally allowed existence of three years, are entities which can sell, broker, market or aggregate electricity to the end-users.

The ERC has yet to decide on when the interim open access (IOA) will finally come into play. The IOA was later renamed Power Supply Option Program (PSOP) to avoid confusion with the legal definition of open access set forth under the Electric Power Industry Reform Act (EPIRA).

Within the franchise area of Meralco, it was gathered that roughly 27 percent of its customer base are qualified to avail of supply under open access, or what the industry terms as “customer choice.”

The PSOP policy will initially cover end-users with at least 1 megawatt peak demand in the preceding 12 months – it means that they can already contract or buy their supply directly from their preferred power producers. Many of the qualified customers are hoping that open access will help bring down electricity rates, though some quarters are actually apprehensive if such outcome will really be achieved.

Under the rules, the PSOP shall be implemented initially in the Luzon grid. It will cease upon the introduction of the EPIRA-sanctioned open access.