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MANILA ELECTRIC Co. (Meralco), the country’s biggest power distribution utility, has remained the top supplier of retail electricity but its market share has steadily declined as of the end-June billing period, latest industry data show.

In its latest report, the Philippine Electricity Market Corp. (PEMC) said Meralco had kept its lead in terms of number of registered customers served, but as of end-June its share stood at 31%, or lower than end-March’s 34%.

Compared with a year earlier, Meralco’s share slipped significantly from 56%, said PEMC, which serves as a repository of data on the retail electricity market.

“The report provides indications on how the retail market performed during the period in review and how it fared with the previous quarter’s performance,” it said in its report.

The figures are the latest proof of the impact of retail competition and open access (RCOA) on the dominant player in electricity supply. RCOA rules call for contestable customers, or those whose consumption has grown to reach a set threshold, to buy their electricity from Energy Regulatory Commission (ERC)-licensed retail electricity suppliers (RES).

In effect, these big electricity users or so-called “contestable customers,” are required to move away from being within the captive market of a distribution utility.

The rules have since been put on hold by a temporary restraining order (TRO) issued by the Supreme Court, although those consuming an average of at least one megawatt have not been banned from switching.

“We’re trying to hold it [market share],” said Oscar S. Reyes, Meralco president and chief executive officer, when asked recently about how the company was faring in retail electricity.

“When we were sort of temporarily in abeyance, that resulted in a period where we could not sign up contracts,” he said. “Fortunately, that was just for a few months and I think we’re holding [on to our market share].”

Asked about how Meralco plans to hold on to its market share, Mr. Reyes said: “I think we’ll just sort of compete with better products, better service offerings and better pricing.”

“It’s a good market. You’ll see that if you leave the market to operate as it is, have as much competition, leave the choice to the customer, then the customer has the best of all worlds,” Mr. Reyes said.

The Department of Energy (DoE) is looking at making the switch voluntary instead of mandatory just to move retail competition forward. It has sought comments from industry players on a draft circular that does away with provisions that were put on TRO.

“I think that’s good for the customer. It respects customer choice. That’s fine. We support anything that supports customer choice and promotes competition,” Mr. Reyes said.

Meralco sells electricity on retail through its unit MPower, a “local RES” that serves within the franchise of the distribution utility.

As of June, PEMC counted a total of 27 RES, 12 local RES, and 21 suppliers of last resort, or those that are allowed to supply contestable customers that have failed to sign up for a supply contract during the mandated period.

“With the increased number of participants, the shares are now divided among more suppliers than in the previous periods, thus, the observed decreasing trend in the share of [Meralco] in terms of the number of registered Contestable Customers served,” PEMC said.

Next to Meralco in terms of share in the number of registered contestable customers served was Aboitiz Energy Solutions, Inc. with 18%, or lower than the previous quarter’s 19%, but higher than year ago’s 13%.

Trans-Asia Oil & Energy Development Corp., since renamed Phinma Energy Corp., followed with 9%, about the same as the previous quarter, but higher than the previous year’s 3%.

Danielle R. del Rosario, Phinma Energy assistant vice-president and head of sales and marketing, said she was hopeful that the DoE’s draft rules would move forward.

“Based on the draft resolution of DoE on the rules of RCOA for contestable customers, the push is really to allow for voluntary migration of customers, to allow them to switch to their provider of choice,” she said in a recent interview.

“What we hope to move forward is at least to resolve continuity of RES of RCOA to be able to give new licenses for those who wish to participate,” she added.

She said the draft DoE resolution also sets down the responsibilities of distribution utilities, which remains the default providers of distribution services.

“There should be no preferential treatment. So all energy suppliers, all customers falling under a distribution utility should receive the same attention and service whether or not they get their actual energy supply from the distribution utility or from another supplier of their choice. I think those are very important things,” she said.

Reference:

Saulon, V. V. (November 22, 2017). Meralco top retail power supplier, share erodes. Business World. Retrieved from http://bworldonline.com/meralco-top-retail-power-supplier-share-erodes/

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