Lower power rates in the offing as Visayas shifts to RCOA

A row of electric meters of the Visayan Electric Company, Cebu City’s power provider, on Bateller Street, North Reclamation Area, Cebu City. (CDN FILE PHOTO)

Despite setbacks in the full implementation of the Retail Competition and Open Access (RCOA) scheme in the power industry, consumers are still seeing its benefits and are taking advantage of their power to choose where to source their electricity supply.

As Cebu and the Visayas start to shift to RCOA, AboitizPower president and chief operating officer Antonio Moraza said customers will definitely emerge as winners.

The RCOA is among the salient features of the Electric Power Industry Reform Act (Epira), which Moraza said has proven itself to be beneficial to consumers, bringing in investments, encouraging competition and ultimately, lowering rates.

“Epira has worked because there are so many players building power plants even resulting to an oversupply, and there is tough competition for services and prices. It has given the customers the power to choose,” he said in a statement.

Customized

Under RCOA, power customers consuming an average of one megawatt and up can voluntarily look for their own retail electricity suppliers (RES) and can customize their contracts according to dispatch, technology or power plant.

According to the Energy Regulatory Commission (ERC), there are 178 contestable customers in the Visayas, 129 of which are in Cebu.

The RCOA, through issuances from the Department of Energy (DOE) and ERC, makes it mandatory for big power consumers to source their electricity supply from licensed RES.

Last February 22, however, the Supreme Court, acting on the petition filed by the Philippine Chamber of Commerce and Industry, issued a temporary restraining order (TRO) on these issuances.

While mandatory switching is not allowed at present, customers may still voluntarily choose their power generator.

Around 100 megawatts out of the 200-megawatt requirement of contestable customers in Cebu have already switched to different RES trying to get a foothold in the province.

Many of these establishments are malls, resorts, or factories.

By June this year, the RCOA threshold is expected to drop to 750 kilowatts per hour, enabling more establishments to benefit from lower prices brought about by stiffer competition among power producers.

Customers that choose to go green can look for suppliers with renewable power plants.

Manufacturing plants that need reliability and dependability can choose to sign up with suppliers with a solid portfolio of baseload, intermediate and peaking power plants.

Whom to choose

Moraza said that customers can take advantage of their power to choose by signing up with established and respected players in the energy industry.

“Customers must not entirely base their decision on the price but the track record of the supplier, the suppliers’ portfolio (of power plants) and the services the supplier will provide,” he said.

“Suppliers that have a wide portfolio can give assurances in terms of supply and reliability. Customers can have peace of mind,” Moraza added.

AboitizPower, through its RES subsidiaries Aboitiz Energy Solutions (AES), Advent Energy and Prism Energy, boasts of its wide portfolio of power plants nationwide – fueled by renewable sources like geothermal, large hydro, run-of-river hydro, solar and soon biomass.

The company also utilizes the reliability of thermal power plants fueled by coal and oil.

As of end 2016, AboitizPower and its partners have a net salable capacity of 3,955 MW from close to 50 power plants all over the country.

RCOA allows customers to leverage on their demand and usage to get better services and better prices, with close to 20 RES in the market battling to service close to 2,000 RCOA customers in Luzon and the Visayas.

Consumers will decide

Wilfredo Rodolfo, AboitizPower assistant vice president for branding and corporate communication, said they have been going around the country to inform stakeholders about this game-changer.

Reacting to the TRO as well as reports that some distribution utilities (DU) “refuse” to let go of their customers, Rodolfo said the decision to switch to the RCOA will still fall in the hands of the consumer.

“At the end of the day, they still have that power to choose. We will be happy to offer our services, but they can also opt to remain with their DUs,” he said.

While the Epira has changed the way the power industry in the Philippines works, Rodolfo said there is a need for government to foster the atmosphere of competition.

He said investing in the Philippine power industry should be made easier, particularly in the area of permitting, since there are a lot of investors showing interest these days.