Monthly switching of power suppliers allowed under retail competition

by Myrna Velasco – January 26, 2016 (updated)

from Manila Bulletin

Power customers within the threshold qualified for contestability under retail competition and open access (RCOA) can switch electricity suppliers on a monthly basis, according to the Energy Regulatory Commission.

Lawyer Debora Anastacia Layugan, ERC director of Market Operations Service, in a presentation to media said ‘frequent supplier switching’ is one of the advantages that contestable customers could have in competitive retail market regime.

“The beauty of RCOA is that a customer may switch into another supplier should it wish to even on a monthly basis as long as all requirements needed for switching are satisfied,” she stressed.

In fact in other power markets, the ERC official has noted that supplier switching is even done on hourly or daily basis depending on the level of maturity of their power markets.

She noted though that since the restructured electricity market in the Philippines is still stepping up to its promise of giving customers their “power of choice,” the monthly supplier switching may yet be a good starting point.

The mandatory implementation of RCOA is targeted June 26 this year. The threshold will also be lowered to average peak demand of 750 kilowatts (kW) for the qualified contestable customers.

Under the era of retail competition, contestable customers would refer to those who can already exercise their power to choose and directly contract their electricity requirements with their preferred retail suppliers.

A retail electricity supplier (RES) under this market paradigm shall be “any person or entity authorized by the ERC to sell, broker, market or aggregate electricity to the end-users.”

In the RCOA regime, the electricity prices negotiated by the parties will no longer be approved by the industry regulator.

The regulatory body further noted that “like the prices, contracts are also not subject for approval of the ERC, thus, parties may include all of their agreed terms in the contract.”