DOE to dangle RCOA-anchored ‘power of choice’ in Mindanao

Published July 8, 2021, 3:21 PM

by Myrna M. Velasco

Electricity consumers in Mindanao can soon exercise their ‘power of choice’ when it comes to their preferred electricity suppliers and on service that will fit their budgets, with the plan of the Department of Energy (DOE) to finally expand the coverage of Retail Competition and Open Access (RCOA) to cover power end-users in the southernmost grid.

According to Energy Assistant Secretary Redentor E. Delola, the introduction of power retailing to qualified contestable customers in Mindanao, will be a follow-through market development that the agency will be advancing in the grid following the commercial operation of a Wholesale Electricity Spot Market (WESM) in the area this year.

“With the expected commercial operations of the WESM in Mindanao in the next quarter, we shall develop and promulgate the RCOA policies for the grid,” the energy official said.

He added that the RCOA framework to be crafted shall center on when that market policy will be operationalized commercially in the grid – and such shall be reckoned on the rules and guidelines already prevailing for contestable customers in the Luzon and Visayas grids.

Contestable customers are those segment of electricity end-users who can already contract directly for their power supply from preferred generators and service providers – and the threshold for Luzon and Visayas is now at 500 kilowatts and higher.

“To date, we have been receiving feedback or queries from customers in Mindanao interested in participating in RCOA. Thus, the need to fast track its implementation,” Delola noted.

In the integrated Luzon and Visayas power markets, the DOE official emphasized that retail competition had grown at a relatively robust pace – despite the array of legal as well as policy implementation hurdles thrown against the policy’s way.

The energy official highlighted that “since the implementation of RCOA in 2013, we saw significant increase in the number of contestable customers eligible to choose their own Supplier.”

He stressed that from RCOA customer base of 892 in June 2013 as logged by WESM as the central registration body (CRB), that already climbed to 2,920 electricity end-users who have been issued with certificates of contestability by the Energy Regulatory Commission (ERC) – and that’s an equivalent increase of 227-percent.

The licensed retail electricity suppliers (RES), on the other hand, had already risen to 71 entities or an addition of 40 suppliers from the kick-off of RCOA implementation eight years ago.

“The implementation of RCOA had encountered challenges, primarily, the Supreme Court order restraining the mandatory implementation. As such, the DOE promulgated policies in 2017 making participation to RCOA on voluntary basis,” Delola narrated.

Given the widening base of RCOA customers, the energy official likewise indicated the necessity to further ease the rules on participation of end-users – especially if retail competition will already tread into ‘aggregation’ or if the threshold will already be brought down to the household level.

“With the reduction of threshold, we saw the need to relax the requirements to encourage greater participation by contestable customers. We have promulgated in 2019 a policy relaxing the participation requirements, particularly making voluntary the registration of contestable customers in the WESM,” Delola pointed out.

Relative to that target, he further stated that the DOE “will be rolling out the amendments to the WESM and the Retail Rules and corresponding market manuals.”

 
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