ERC: Biz, residential groups see lower electricity bills after lowering of contestability threshold
MANILA— The Energy Regulatory Commission on Thursday reported that the lowering of the contestability threshold to 100 kilowatts that took effect last June is already providing cost benefits to those who have switched to the new system.
Atty. Chiara Blanco, Chief Energy Regulation Officer for the Contestable Market Division of the ERC, said 8,674 end-users identified as residential groups, industrial and commercial organizations have switched as of end-August.
The next wave will allow 12,491 new contestable customers to experience the same savings if they take advantage of the lowering of the threshold.
“Qualified medium-sized commercial establishments like schools, hospitals, office buildings, hotels, manufacturing facilities, and other electricity users may now directly contract with their preferred Retail Electricity Supplier,” she said.
Villa Escudero was one of the first movers. An 800-hectare working coconut plantation and cultural resort in Tiaong, Quezon, has been battling a huge energy bill to operate the resort. When its chief engineer saw the lowering of the threshold in the news, he immediately got in touch with the company’s solar energy provider Corenergy, which took care of the switching with no disruption and zero costs.
Manuel Escudero, Director of Management Services of Villa Escudero, said when he saw the P300,000 reduction in his monthly bill in the first month after the switch, he first thought it was a fluke.
“I said, let’s wait for the bill in the coming month. And true enough, the savings were consistent,” he said.
“Laway lang ginastos namin, but we are saving a lot,” said Escudero.
Corenergy President Francis del Val pointed out that these savings make a huge difference to entrepreneurs these days, with inflation, higher diesel prices, and overall tightness in the business and economic space.
Blanco noted that this is a mandate two decades in the making. From the enactment of the Electric Power Industry Reform Act (EPIRA) of 2001, the threshold for Retail Competition and Open Access (RCOA) contestability threshold was lowered to one megawatt in Luzon and Visayas in 2013, then to 750 kilowatts in 2016, to 500 kilowatts in 2021 and then 100 kilowatts in 2026.
The road doesn’t end there, however. Eventually, the law should allow households with any level of consumption to be able to choose their electricity provider.
Businesses that are looking to switch will need to do the following:
1. Get in touch with their distribution utility like Meralco for the Greater Metro Manila area, which will check whether consumption is at least 100 kilowatts.
2. Submit their intention to switch and get in touch with their Retail Electricity Supplier of choice, who may handle the four different contracts that they will have to sign.
A list of all accredited RES is on the ERC website.
Those who are switching can negotiate their own price, contract duration, and risk terms, exit their current distribution utility’s blended generation cost, access renewable-backed supply for sustainability goals, and pool with other businesses with smaller loads to qualify collectively for the Retail Aggregation Program.