November 22, 2017
MANILA ELECTRIC Co. (Meralco), the
country’s biggest power distribution utility, has remained the top supplier of
retail electricity but its market share has steadily declined as of the
end-June billing period, latest industry data show.
In its latest report, the Philippine
Electricity Market Corp. (PEMC) said Meralco had kept its lead in terms of
number of registered customers served, but as of end-June its share stood at
31%, or lower than end-March’s 34%.
Compared with a year earlier,
Meralco’s share slipped significantly from 56%, said PEMC, which serves as a
repository of data on the retail electricity market.
“The report provides indications on
how the retail market performed during the period in review and how it fared
with the previous quarter’s performance,” it said in its report.
The figures are the latest proof of
the impact of retail competition and open access (RCOA) on the dominant player
in electricity supply. RCOA rules call for contestable customers, or those
whose consumption has grown to reach a set threshold, to buy their electricity
from Energy Regulatory Commission (ERC)-licensed retail electricity suppliers
(RES).
In effect, these big electricity
users or so-called “contestable customers,” are required to move away from
being within the captive market of a distribution utility.
The rules have since been put on
hold by a temporary restraining order (TRO) issued by the Supreme Court,
although those consuming an average of at least one megawatt have not been
banned from switching.
“We’re trying to hold it [market
share],” said Oscar S. Reyes, Meralco president and chief executive officer,
when asked recently about how the company was faring in retail electricity.
“When we were sort of temporarily in
abeyance, that resulted in a period where we could not sign up contracts,” he
said. “Fortunately, that was just for a few months and I think we’re holding
[on to our market share].”
Asked about how Meralco plans to
hold on to its market share, Mr. Reyes said: “I think we’ll just sort of
compete with better products, better service offerings and better pricing.”
“It’s a good market. You’ll see that
if you leave the market to operate as it is, have as much competition, leave
the choice to the customer, then the customer has the best of all worlds,” Mr.
Reyes said.
The Department of Energy (DoE) is
looking at making the switch voluntary instead of mandatory just to move retail
competition forward. It has sought comments from industry players on a draft
circular that does away with provisions that were put on TRO.
“I think that’s good for the
customer. It respects customer choice. That’s fine. We support anything that
supports customer choice and promotes competition,” Mr. Reyes said.
Meralco sells electricity on retail
through its unit MPower, a “local RES” that serves within the franchise of the
distribution utility.
As of June, PEMC counted a total of
27 RES, 12 local RES, and 21 suppliers of last resort, or those that are
allowed to supply contestable customers that have failed to sign up for a
supply contract during the mandated period.
“With the increased number of
participants, the shares are now divided among more suppliers than in the
previous periods, thus, the observed decreasing trend in the share of [Meralco]
in terms of the number of registered Contestable Customers served,” PEMC said.
Next to Meralco in terms of share in
the number of registered contestable customers served was Aboitiz Energy
Solutions, Inc. with 18%, or lower than the previous quarter’s 19%, but higher
than year ago’s 13%.
Trans-Asia Oil & Energy
Development Corp., since renamed Phinma Energy Corp., followed with 9%, about
the same as the previous quarter, but higher than the previous year’s 3%.
Danielle R. del Rosario, Phinma
Energy assistant vice-president and head of sales and marketing, said she was
hopeful that the DoE’s draft rules would move forward.
“Based on the draft resolution of
DoE on the rules of RCOA for contestable customers, the push is really to allow
for voluntary migration of customers, to allow them to switch to their provider
of choice,” she said in a recent interview.
“What we hope to move forward is at
least to resolve continuity of RES of RCOA to be able to give new licenses for
those who wish to participate,” she added.
She said the draft DoE resolution
also sets down the responsibilities of distribution utilities, which remains
the default providers of distribution services.
“There should be no preferential
treatment. So all energy suppliers, all customers falling under a distribution
utility should receive the same attention and service whether or not they get
their actual energy supply from the distribution utility or from another
supplier of their choice. I think those are very important things,” she said. —
Victor V. Saulon.
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