ERC lowers power retail threshold to 500kW

by Myrna Velasco – May 29, 2016

from Manila Bulletin

Wider scope of end-users can soon exercise “power of choice” on their electricity supply procurement, as the Energy Regulatory Commission (ERC) already set the successive lowering of retail competition threshold to 500 kilowatts (kw).

As stipulated in ERC Resolution No. 10 Series of 2016, the reduction of competitive and power retailing threshold to 500kW was set on June 26, 2018.

The regulatory body nevertheless qualified that this will still be subject to review depending on the outcome of the initial mandatory thresholds of 1.0 megawatt and 750 kilowatts that are for enforcements this year and 2017.

“The lowering of the threshold to cover an end-user with an average monthly peak demand of at least 500kW is set on 26 June 2018, subject to the review of the performance of the retail market,” the ERC stressed.

It added that corollary to this review of the retail market results by then, the ERC “shall establish a set of criteria as basis for the lowering of the contestability threshold.”

Notably, at 500kW contestability level, the regulatory body is also envisioning the start of aggregation of demand – wherein end-users in a contiguous area (adjacent domains like residential villages and similarly situated entities) can lump their requirements to enable them to directly contract their power supply.

Retail aggregation, as defined by industry regulators, entails “the joining of two or more end-users within a contiguous area into a single purchasing unit,” to make them qualified in the contestable market to be served by licensed retail electricity suppliers.

The retail electricity suppliers (RES) will be relevant addition in the country’s power supply chain – which will then offer packages and services that befit each end-user’s demand as well as usage and cost preferences.

They will effectively replace the function long-held by franchised distribution utilities that were then front-liners in servicing the electricity needs of Filipino consumers.

With the advent of retail competition and open access in the restructured power sector, ratepayers are hopeful that they can also get out from the shackles of recurrent complaints of expensive power rates on top of improved service offers.