Meralco remains the biggest player in power retailing segment – DOE report

Published July 22, 2021, 1:59 PM

by Myrna M. Velasco

The power retailing segment of the restructured electricity sector still crowned power giant Manila Electric Company (Meralco) as the biggest player with 37-percent market share, according to a report of the Department of Energy.

The other players that have been elbowing Meralco in the competitive retail market are Aboitiz Power Corporation and its licensed retail electricity supplier (RES) entities with 23-percent share in the pie; then the Ayala group that has 16-percent cut in the fraction; and followed by San Miguel group with 10-percent share.

Meralco logo

The other RES players have jointly gained control of 16-percent in the retail power market – or the industry segment underpinned by the Retail Competition and Open Access (RCOA) policy in the restructured electricity sector that empowers contestable customers to choose their preferred electricity service providers and they can also directly contract with them.

As of the year 2020 cut-off date in the DOE report, the agency documented 1,622 participants that have been registered in the RES market – with the bulk still in the 1.0-megawatt and higher threshold with 1,133 participants; and 363 RES customers in the 750kW and up bracket.

Within that review period, the threshold was still at 750kW and higher; as the Energy Regulatory Commission (ERC) just brought that down to 500kW in February this year.

On the whole, the DOE stipulated that “there was an increase in the prospective contestable customers as many became interested, willing to participate and avail of the advantages of the competitive retail market.”

The department thus emphasized “this led to an increase in consumption per customer class,” while on the other sphere, the uptick in demand of this segment of customers triggered overall downtrend in power generation charges.

The customers exercising their ‘power of choice’ in the RCOA regime of the power industry were largely known to have been paying relatively lower tariffs and they also benefit from better service; while some are even plumping for their preferred supply source – primarily those that are keen on patronizing renewable energy (RE) for their electricity needs.

Based on data previously released by the ERC, the end-users who settled on securing their energy supply with RES were able to enjoy overall cheaper electricity rates – reported at an average of P3.63 per kilowatt hour (kWh) which is lower than the grid rates in Luzon and Visayas that are in the range of P3.9513 to P5.0985 per kWh.

After this year’s threshold lowering to 500kW, the power industry regulator is scheduling to bring that down further to the level of 100kW to 499kW by January 26, 2022; and the final phase at 10kW to 99kW, that may already reach households, and is targeted on January 26, 2023.

When retail competition will already enter the doorstop of residential customers, it is expected that some rules in the Competitive Retail Electricity Market (CREM) will also be eased – especially on the required enlistment of customers in the Wholesale Electricity Spot Market (WESM) as the central registration body of the RCOA participants.

Once households can already opt for RES as their supplier, they will no longer be in the ‘captive’ service domain of the distribution utilities; and a decision to stay with their franchised DU will just be more of a choice rather than a rule.