More retail electricity suppliers accredited

MANILA, Philippines —More retail electricity suppliers (RES) joined the Competitive Retail Electricity Market (CREM) in the second quarter as the Energy Regulatory Commission (ERC) granted a total of 42 RES licenses and authorized 25 local RES during the period.

The suppliers now compete for the supply of electricity of contestable customers in the CREM, where qualified contestable customers, or those consuming 750 kilowatt (KW) and above, have the option to choose their electricity provider, either from an RES or from a local RES.

Data from the ERC’s second quarter monitoring report of the CREM show that the total registered contestable customers as of the second quarter is 2,089, 70 percent of which or 1,460 have entered into retail supply contracts (RSC), which means these qualified customers have decided to source electricity from an RES.

In contrast, the remaining 629 or 30 percent stayed with the regulated services of their respective distribution utilities (DU).

In terms of market share, the total demand of all contestable customers as of the second quarter is at 4,977.31 MW.

The ERC’s monitoring report also found that out of the suppliers in the CREM, 55 percent of the ERC-licensed RES are affiliates of generation companies (gencos) while 20 percent are also operating a generation company as another business segment.

In addition, 17.5 percent have no affiliations in the electric power industry while the remaining 7.5 percent are affiliated with DUs.

The ERC pointed out that having more suppliers that are genco-affiliated gives confidence that electricity supply is ensured and that they have the capability to offer competitive or cheaper prices in the CREM.

“This is a positive indication which signifies that competition in the CREM is gaining ground and slowly breaking the monopoly in the supply of electricity by allowing more entities to act as a supplier,” the ERC said.

Moreover, the ERC reported that CREM saw an almost two percent increase in the participation of contestable customers in the second quarter, despite the imposition of community quarantines in most areas of the country.

“Although the contracted capacity of these contestable customers were reduced due to the impact of the pandemic on operations, the increase means that more contestable customers opted to enjoy the benefits of Retail Competition and Open Access (RCOA),” the ERC said.

In terms of pricing, the ERC’s evaluation revealed that 11 RES have decided to offer lower rates for the quarter, while 14 RES have maintained their previous quarter’s offer prices, and seven RES have increased their prices.

It added that weighted average price decreased to P3.97 per kilowatthour in May and June from P4.12 kwh in April. The ERC said the reduction manifests strengthened competition in the CREM.