THE Energy Regulatory Commission (ERC) said the pandemic’s “silver lining” is that more contestable customers are joining the retail electricity market, where prices are also falling.
In the second quarter, the commission noted a 2% rise in the number of buyers with over 750 kilowatts of consumption in the contestable retail electricity market (CREM), though they contracted less power as the pandemic affected their operations.
The weighted average price in the market is falling, with June at P3.95 per kilowatt-hour (kWh), down from May’s P3.97/kWh and April’s P4.12/kWh. Over the period, 11 retail electricity suppliers offered lower rates, while seven raised their prices and 14 maintained theirs compared with the previous quarter.
“This positive development stimulates competition among retail electricity suppliers and will entice more contestable customers to shift to these electricity providers”, ERC Chairperson and Chief Executive Officer Agnes VST Devanadera said in a statement Wednesday.
The market posted 4,977.31 MW of electricity demand from all contestable customers between April and June, with 81% being delivered by retail electricity suppliers. The rest was met by distribution utilities.
The market is “slowly breaking the monopoly in the supply of electricity,” which “gives confidence that electricity supply is ensured and that they have the capability to offer competitive or cheaper prices in the CREM.”
Meanwhile, two in 10 market participants operate a generating facility as a separate business, 17.50% are outside the energy industry, and 7.50% are related to distribution utilities.
As of the end of June, there were 2,089 registered contestable customers with contestability certificates. Of these, 70% have entered into retail supply contracts, while the rest are still powered by their respective distribution utilities.
About 1,120 of those with supply contracts from retail electricity suppliers need 1,000 kW or more power.
The ERC, in the second quarter, granted 42 licenses to retail electricity suppliers and authorized 25 suppliers from distribution utilities. Contestable customers can source their power needs from either type of supplier. — Adam J. Ang