Electricity retail market grows bigger on 2nd year


The electricity retail market has attracted more participants on its second year of operation, indicating that the concept is gaining increasing acceptance among power suppliers and consumers.

From the initial registration of 275 registered participants, the number has increased to
428 on the second year of its commercial operations, spot market operator Philippine Electricity Market Corporation (PEMC) said.

This year marks the second year of the full integration of retail competition in the Wholesale Electricity Spot Market (WESM).

According to the PEMC, of the 428 participants in the retail market, more than 50 percent are contestable customers (CC) at 371. Registered CCs are free to choose where to source their respective electricity supply requirements.

The retail market currently reflects 43 suppliers, with 20 retail electricity suppliers (RES), 14 local retail electricity suppliers (Local RES) and nine suppliers of last resort (SOLR).

The PEMC said contestable customer participation in the retail market has grown to around 54.6 percent from 240 in the first year to 371 as of June.

The number is expected to increase with the release of a Department of Energy (DOE) circular titled “Providing Policies to Facilitate the Full Implementation of Retail Competition and Open Access (RCOA) in the Philippine Electric Power Industry.”

“We expect the expansion of the retail market with the release of the DOE circular as this officially lowers the threshold for contestable customers from a minimum of 1 MW (megawatt) consumption to 750 kW (kilowatt),” said PEMC president Melinda L. Ocampo.

Based on PEMC data, Manila Electric Company’s (Meralco) MPower is currently the largest supplier in terms of volume and the most number of CCs.

Effective spot settlement prices (ESSPs) for the contestable market — which reflects the estimated customer settlement transaction rates in the WESM — has been consistently lower than that of the captive customers.

The ESSP for the first year of the retail market operations was at P 4.27 per kilowatt-hour (kWh).

This was due to the implementation of regulated prices for the November and December 2013 billing months as well as the reduction of the offer cap which took effect in January 2014.

The ESSP decreased to P2.91/kWh on the second year because of the imposition of the secondary price cap mechanism.

“Overall, the retail market has shown a steady growth with the increase in registration and consistent lower ESSP for CCs. We look forward to a very promising third year of operations as we gear up for the appropriate market design to accommodate the lowering of the retail market threshold from 1MW to 750kW,” said Ocampo.


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