Business World Online
Posted on July 21, 2015 09:07:00 PM
By Claire-Ann M. C. Feliciano, Senior Reporter
CUSTOMERS that selected their own power suppliers grew by more than half at the end of the second year of implementation of the retail competition and open access (RCOA) program.
The Philippine Electricity Market Corp. (PEMC), which acts as the central registration body, said in a statement yesterday that participating contestable customers (CCs) rose 54.58% to 371 as of June 25 from 240 during the initial implementation of RCOA.
CCs are regulator-accredited electricity end users with a monthly average consumption of 1 megawatt (MW).
“These registered CCs have exercised their freedom of choice in sourcing their respective electricity supply requirements,” PEMC said.
PEMC’s statement showed that 18 more applicants are currently being evaluated, which could soon bring the total number of CCs to 389.
Other existing members of the RCOA are retail metering service providers (24); retail electricity suppliers (16); local retail electricity suppliers (12); and suppliers of last resort (5).
Total registered participants at the retail market are currently at 428 from the 275 recorded during RCOA’s initial implementation.
This could further increase to 461, with pending applications for various membership categories.
PEMC further said that Manila Electric Co.’s subsidiary, MPower, remains the largest supplier in terms of volume and number of customers.
Melinda L. Ocampo, PEMC president, said in the statement that the Department of Energy’s (DoE) move to expand the coverage of the RCOA will bring more participants into the retail market.
“We expect the expansion of the retail market with the release of the DoE circular as this officially lowers the threshold for contestable customers from a minimum of 1 MW consumption to 750 kilowatts (kW),” Ms. Ocampo was quoted in the statement as saying.
The lowering of the RCOA threshold was announced by the DoE through a June 19 circular, which allows those customers with at least 750 kW consumption to enter into supply contracts with their preferred suppliers by June 25 next year.
This will pave the way for the expanded implementation of the RCOA by June 26 next year, or three years after the program commenced in 2013.
The RCOA allows electricity end users to secure contracts with suppliers, which in turn can provide packages that suit client needs and preferences.
Apart expanding the coverage of RCOA, the DoE also ordered existing customers covered by RCOA to secure contracts with suppliers by June 25, 2016.
In its statement yesterday, PEMC also reported that effective spot settlement prices (ESSPs) for the contestable market -- which reflects settlement rates at the WESM -- consistently showed lower rates compare to that of captive customers.
ESSPs for the first year of RCOA’s implementation were at P4.27 per kilowatt-hour (/kWh), falling to P2.91/kWh in the second year with the implementation of a secondary cap mechanism.
Called the price threshold mechanism, the P6.245/kWh secondary cap kicks in once an average threshold of P9/kWh is reached over a 168-hour period.
Prices were computed based on historical prices, with allowance for three intervals hitting high market clearing prices.
This was put in place to protect consumers from excessive price hikes due to tightness of supply in the spot market.
“Overall, the retail market has shown steady growth with the increase in registration and consistent lower ESSP for CCs,” Ms. Ocampo said.
“We look forward to a very promising third year of operations as we gear up for the appropriate market design to accommodate the lowering of retail market threshold from 1 MW to 750 kW,” she added. source
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