The Energy Regulatory Commission said Monday it issued a resolution expanding the coverage of the Retail Competition and Open Access to promote competition and ensure the successful restructuring and modernization of the electric power industry.
“The expansion of the RCOA coverage is the embodiment of the EPIRA’s end-goal of achieving competition at the retail or end-user level. Promoting robust and fair competition among the market participants is definitely one of the significant considerations that the ERC is eyeing which can help boost further the country’s economy especially in the power industry during this trying times,” ERC Chairperson Agnes Devanadera said in a statement.
RCOA allows large power users to choose their own suppliers under the Electric Power Industry Reform Act of 2001.
The new resolution expands the coverage of RCOA to cover end-users with an average monthly peak demand of at least 500 kilowatts for the preceding 12 months, which is Phase III, on a voluntary basis.
Based on the said threshold, all qualified end-users can be considered as contestable customers under the Phase III threshold level (500kW to 749kW) and will be allowed to switch to the Competitive Retail Electricity Market starting Feb. 26, 2021.
The ERC said the expansion of the threshold was a result of a thorough evaluation and study of the readiness of the market, the necessary infrastructure, customer awareness and the economic impact of the migration of contestable customers towards CREM, in support of the national government’s thrust towards economic recovery.
Devanadera cited ERC data as of November showing that the weighted average price in the CREM or the CREM for Phase 1 (those consuming 1 MW and up) and Phase 2 (those consuming 750 kW) was P3.63 per kilowatt-hour, lower than the generation charge billed by distribution utilities for the captive market, for the same period, in Luzon and Visayas which ranged from P3.9513 per kWh to PhP5.0985 per kWh.
“We expect that competition will be stronger and the supply of electricity will become more affordable and reliable as RCOA becomes more popular in the coming years,” Devanadera said.
The RCOA scheme is operational will remain in effect in the Luzon and Visayas grids.
“Indeed, the RCOA has gained ground and the intent of the EPIRA was achieved for the Phases 1 and 2. We are optimistic that the expanded RCOA implementation will result to further reduction in electricity rates, which will encourage more investors in the country and bring more job opportunities. This will definitely aid the country towards economic recovery from the negative impacts of this pandemic,” the ERC said.