ERC Empowers Consumers with Pilot Implementation of Retail Aggregation
In a bid to provide consumers with more options in terms of costs and benefits, the Energy Regulatory Commission (ERC) hailed the pilot implementation of the Retail Aggregation scheme in UP Diliman Campus during the signing of the Memorandum of Understanding (MOU) between the University of the Philippines and MERALCO held on 24 June 2022."We have just promulgated the Rules for the Electric Retail Aggregation Program which is another means of empowering consumers to exercise their freedom of choice. The Rules on Retail Aggregation took effect today as we celebrate the launch of the Pilot Implementation of Retail Aggregation,"
ERC Chairperson and CEO Agnes VST Devanadera disclosed.
The Rules for the Retail Aggregation Program, or the "Retail Aggregation Rules" for brevity, seeks to establish standardized rules and procedures governing the aggregation of electricity requirements of end-users in the Competitive Retail Electricity Market (CREM). It will also prescribe and clarify the requirements, conditions, eligibility, qualifications and disqualifications of participants in the Electric Retail Aggregation Program.
Devanadera sees the launch as an enabling and empowering move that offers consumers alternative means to manage their power consumption from the volatility of power rates that are sensitive to external factors such as fuel and the current global crisis. "The ERC would like to thank the UP and MERALCO for their initiative in making possible this pilot implementation. This pilot will help promote Retail Competition and Open Access. With their partnership, we hope that the electricity consumers will be more enlightened about the benefits of retail aggregation which ultimately is for the consumers to have the power to choose from among the electricity suppliers that offer better rates and better services,"
ERC Chair Devanadera averred.
As of April 2022, there is a total of 1,897 contestable customers with total demand of 3,924.53MW who are enjoying lower rates in the retail market, with a weighted average generation rate of PhP4.05/kWh.
The Retail Aggregation Program is a scheme wherein two or more end-users or all end-users within a contiguous area joined together and are treated as a single Contestable Customer, based on the current threshold demand prescribed under the rules, wherein such Contestable Customer shall be part of the Contestable Market, and will also have the same benefits enjoyed by the Contestable Customers in the RCOA. All persons or entities engaged in consolidating the electricity requirements of end-users, for the purpose of purchasing and reselling electricity on a group basis, shall secure a RES License and explicitly manifest its intent to aggregate requirements of contestable customers to act as a Retail Aggregator.
The Retail Aggregation Rules shall apply to: (1) End-users; (2) Retail Electricity Suppliers (RES); (3) Local Retail Electricity Suppliers (Local RES); (4) Distribution Utilities (DUs); (5) Suppliers of Last Resort (SOLR); (6) National Grid Corporation of the Philippines (NGCP); (7) Central Registration Body (CRB); and (8) All other relevant industry participants, as applicable.
Retail Aggregation shall be implemented where the Retail Competition and Open Access (RCOA) scheme is operational and effective. Aggregation of the electricity requirements of end-users whose total monthly average peak demand is at least 5ookW within a Contiguous Area shall be implemented effective on 26 December 2022. Thereafter, the lowering of the contestability threshold as prescribed under existing rules for individual Contestable Customers shall be the same threshold applied for joined or consolidated End-users under the aggregated scheme described herein.
The aggregation of end-users may be allowed within the geographical boundaries of any of the following: (a) Subdivisions; (b) Villages; (c) Business Districts; (d) Special Economic Zones; (e) Condominium buildings; (f) Commercial establishments such as malls; (g) Mixed-used development complexes; and (h) Such other geographical areas where similarly situated end users are located in which supply of electricity can be measured through metering devices.
In an earlier statement, Devanadera previously noted the impact of the Retail Aggregation program in encouraging competition among electricity suppliers that would redound to the benefit of consumers.“The Retail Aggregation program will encourage competition among Retail Electricity Suppliers, and with competition, consumers will have the power to choose from among the electricity suppliers that offer better rates and better services,”
the ERC Chair stated.