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The promise of retail aggregation

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By Robert B. Roque, Jr.

First, let me acknowledge that our nation is at the crossroads of two presidents today – in the morning President Duterte and, by noon, President “Bongbong” Marcos. Even if I suspend all my biases against the new incumbent, the fact is, much is expected of the proverbial son wanting to redeem the Marcos name.

He could not have assumed the presidency at a more problematic time that even the 31 or so million Filipinos who voted for him would want to see better times before the pandemic started. Since we’re all in the same boat, I truly hope the new administration delivers on its long list of good campaign promises.

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One of those, of course, is the pledge to improve and strengthen the energy sector to reach self-sufficiency amid the country’s growing energy demand.

What’s interesting is that the Energy Regulatory Commission (ERC), hand-in-hand with power retailer Meralco, is already innovating supply contracts to arrive at more competitive rates and services for end-users.

Last week, the ERC announced the approval of guidelines for retail aggregation under the Retail Competition and Open Access (RCOA), which allows electricity end-users in the same area, like a campus or a subdivision, to pool their demand and directly transact with their preferred power providers.

As a kick-off for this new mechanism, the University of the Philippines and Meralco signed a memorandum of understanding to pilot the implementation of retail aggregation. This would consolidate the 149 customer accounts within UP Diliman – with an aggregate power requirement of 4.27 MW – thereby boosting consumption efficiency and enabling the campus to negotiate a lower electricity rate.

With this MOU between Meralco and UP Diliman, ERC Chairperson and CEO Agnes Devanadera hopes that qualified electricity consumers – condominiums, malls, economic zones, and the like with a minimum power demand of 500 KW – will be encouraged by the benefits of retail aggregation and being contestable customers.

For now, the majority of household consumers who do not reside in villages or condominiums may not qualify for this scheme. Some may view this as a form of social discrimination. Still, Firing Line is confident in the long-term commitment of the ERC and Meralco to improve available services to electricity consumers.

Retail aggregation is one big step in the right direction. And with Meralco pledging its continuous participation in exploring ways of expanding customer choice, this mechanism promises to go down to the household level eventually.

Let’s not forget that the industry started retail aggregation only with big customers – the industrial and commercial sectors. Now, this model is already being brought down to the residential level. So in that sense, it’s a promise to fulfill cheaper and more efficient delivery of power services steadily.

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SHORT BURSTS. For comments or reactions, email firingline@ymail.com or tweet @Side_View. Read current and past issues of this column at 

https://www.thephilbiznews.com

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