Lower RCOA attracts new power customers

By Myrna M. Velasco – March 1, 2021, 7:00 AM
from Manila Bulletin

At least 13 new customers – mostly buildings and water pumping stations in Metro Manila that include Maynilad Water Services Inc. – have switched electricity suppliers following the threshold lowering of the Retail Competition and Open Access (RCOA) policy by February this year.

In a briefing with reporters, Jonathan Dela Viña, market operations development manager of the Independent Electricity Market Operator of the Philippines (IEMOP), indicated that the new retail customers applied for switching in January and their switch to retail electricity suppliers (RES) had already been processed this month.

The new power retail customers are end-users within the 500-kilowatt (kW) threshold, of which switch to contestability was enforced by the ERC this year. As a contestable customer, the end-user can directly contract with a retail electricity supplier for the volume, rate and package of services that it prefers.

“IEMOP started processing the 500kW switch requests in January and they have now executed (the RES contracts), so they’ll be supplied by their retail electricity suppliers for the March billing period,” Dela Viña explained.

IEMOP is the operator of the country’s Wholesale Electricity Spot Market (WESM), which also serves as the central registration body for participants in the retail market.

Last year, Dela Viña noted that there have been 194 switches between retail electricity suppliers; and in the period from 2014-2019, RES switches covered 352 customers.

Very often, according to IEMOP, the switches happen at the end of the contracts between the RES and the concerned customer; and pricing had been observed among the main triggering factor for supplier switching. Another emerging trend, according to Dela Viña, is the preference of some customers for renewable energy as a source of their supply.

“We’re seeing that their contracts are already expiring when they first opted for contestable market, so there’s a lot more transfers between RES in 2020,” Dela Viña reiterated.

With the continued lowering of RCOA thresholds in the next two years, IEMOP stated that it is now preparing for anticipated RES switches within the 100-kW threshold and aggregation to be implemented January next year; and onward to the household level which is due for enforcement on January 26, 2023.

“In anticipation of these developments, IEMOP has completed our initial studies for the development of the framework for household level implementation and we presented that to the DOE (Department of Energy) and ERC (Energy Regulatory Commission),” Dela Viña explained.

He further stressed “we have conducted a study to check if there are improvements that we’ll need to introduce to the different market procedures so that we can efficiently implement retail competition at lower thresholds.”