ERC not inclined to hasten lowering of RCOA threshold

Published May 28, 2022, 11:05 AM

by Myrna M. Velasco

Small business owners as well as residential end-users may need to wait longer before they can exercise “power of choice” on their preferred electricity service providers as the Energy Regulatory Commission (ERC) is not inclined to immediately lower the 500-kilowatt threshold for retail competition and open access (RCOA) in the restructured power industry.

ERC Chairperson Agnes T. Devanadera apprised media that even at the current threshold of 500 kilowatts (kW), it is seen that the patronage had not been very bullish and that is being treated as a sign by the regulatory body that there is no need to fast-track bringing down the level of contestability at this time.

“There will always be lowering of the (RCOA) threshold, but we will need a study – it’s not automatic that we immediately bring it down to 100 kW. We have to study that to ensure that consumers are really ready for RCOA, otherwise, our efforts will just go to waste,” the ERC chief stressed.

She reiterated that at the 50KW threshold, “the uptake had not been aggressive, because the choice will really depend on consumers.”

RCOA or power retailing in the deregulated electricity sector started with 1.0-megawatt and above in 2013, and was subsequently brought down to 750kWto 999 kW in 2016. Since last year, the threshold was down to 500kW to 749kW.

Contestable customers or those segment of end-users within the prescribed threshold can already negotiate and contract directly with their preferred retail electricity suppliers (RES) on a voluntary basis based on a Supreme Court ruling on the legal questions previously raised against the RCOA policy.

On further reducing the scale of contestability, Devanadera pointed out that within the prevailing thresholds, “availments are still low because we still have not tried it that long. So we cannot come up with a new threshold instantaneously. We should really have a good study before we do that.”

Currently, there are pleas from relevant stakeholders to already pare the contestability level within the scale of 10 to 99kW so that micro, small and medium enterprises (MSMEs) can already opt for services that shall be catered to by licensed retail electricity suppliers.

In the timeline set forth by the ERC in 2020, the RCOA threshold should have been down to 100kW to 499kW by January 26 this year and the next phase at the range of 10kW to 99kW by January 26, 2023.

At this stage, however, the original timeline of RCOA threshold lowering already incurred delays and the industry regulator has not given any manifestation yet on new implementation schedule.

With RCOA, contestable customers have touted the savings they have been logging on their electric bill payments aside from the fact that they can also choose power suppliers that they really want as well as the kind of technology that will deliver on their energy needs.