WESM operator proposes new measures for retail market

MANILA, Philippines — The operator of the wholesale electricity spot market (WESM) is proposing new measures for easier entry into the retail market.

Independent Electricity Market Operator of the Philippines Inc. (IEMOP) submitted to the rules change committee of the Philippine Electricity Market Corp. (PEMC) a proposal to encourage participation and enhance competition in the retail electricity market through process enhancements and reduction of entry barriers.

In its proposal, IEMOP recommended the voluntary registration of contestable customers as trading participants in the WESM in lieu of their mandatory WESM registration.

This will relieve contestable customers from complying with all membership requirements and from direct WESM exposure.

Moreover, the proposal seeks to revitalize IEMOP’s central registration body (CRB) process of gathering information on all eligible contestable customers such as current supplier, metering information and customer information from distribution utilities.

As the CRB, IEMOP manages the registry of contestable customers and their current suppliers, tracks the market transactions made by their suppliers on their behalf, and facilitates customer-switching in the retail market.

To fasttrack the switching process, the proposed changes seek to require distribution utilities to submit the said customer information every 15th day of the month to the IEMOP for immediate inclusion in its retail market registry.

IEMOP will be able to considerably reduce the processing time for customer switching from 30 calendar days to three working days. This is seen to reduce costs and increase participation of eligible contestable end-users in the retail market.

Increased participation of customers means more competition for suppliers, resulting in greater innovation and better pricing.

“Through this rules-change initiative, we express our commitment to continually seek the enhancement of the current market processes and foster more competition,” IEMOP president Francis Saturnino Juan said.

Under the existing legal framework for Retail Competition and Open Access (RCOA), electricity end-users become part of the contestable market upon reaching the applicable contestability demand threshold.

Under the RCOA regime, end-users that are part of the contestable market, or contestable customers (CCs), are given the choice to choose their supplier of electricity aimed to foster competition in the generation and supply sector.

In 2013, the Energy Regulatory Commission (ERC) certified end-users with one megawatt and above average peak demand to become contestable customers.

In 2016, the DOE announced a lowered threshold to 750 kilowatts and declared full implementation of retail competition up to the household demand level is subject to the annual review and issuances of the DOE and ERC.