Meralco supports customer choice with Aggregation


Posted at Sep 19 2022 10:25 AM

Photo source: Meralco
Photo source: UP MPRO

University of the Philippines Diliman is now set to save P10-P50 million in electricity costs per year after agreeing to serve as a testing ground for Energy Regulatory Commission's recently promulgated Retail Aggregation Program.

The Retail Aggregation Program allows multiple consumers in an area to be treated like a contestable customer or a consumer able to choose their own electricity provider. As such, customers will have an opportunity to group together to be able to contract with a retail electricity supplier (RES) for their electricity requirements at lower costs. This lets them choose the most affordable packages for energy.

Electricity Aggregation Program that could save U.P. about P50-million in energy costs may soon be available for everyone. Photo source: Meralco
Electricity Aggregation Program that could save U.P. about P50-million in energy costs may soon be available for everyone. Photo source: Meralco

U.P. Diliman is projected to save a minimum of P10 million per year, and up to P50 million per year at full capacity once they contract for a lower generation cost with an authorized aggregator or licensed RES.

U.P. President Danilo Concepcion. Photo source: Meralco
U.P. President Danilo Concepcion. Photo source: Meralco

"We can use the money to acquire additional equipment, to upgrade our aging laboratory equipment," Concepcion shares. "Yung upgrading ng equipment, it will put our students' learning, ang kanilang education, at par with the students in the neighboring ASEAN countries."
(Upgrading our equipment will put our students’ learning at par with students in neighboring ASEAN countries.)
"At 'yung pangalawa, siyempre, 'yung level naman ng mga teachers namin. So, kung mayroon kaming additional savings, mapapadala namin halimbawa sa ibang bansa 'yung teacher para mag-aral, mag-training. So, pagbalik nila, mas mataas na 'yung antas, 'yung quality ng kanilang pagtuturo."
(Secondly, additional savings will allow us to send our professors to train abroad. This will advance the quality of their teaching.)

U.P. Diliman is part of a pilot test to help improve the Retail Aggregation Program for customers from residential, commercial, and industrial spaces, who are in contiguous locations nationwide.

U.P. and Meralco signed a Memorandum of Understanding with the Energy Regulatory Commission on June 24, 2022 to serve as a testing ground for the newly drafted Implementing Rules and Regulations (IRR) on the Retail Aggregation Program. 

The IRR is said to be a necessary step towards making the program available nationwide, as it allows the ERC to establish processes that will help ensure efficiency in program implementation, maximize the benefits of the program, and provide protection to both energy providers and their customers. 

The pilot program in U.P. Diliman will give the ERC a chance to see the IRR in action, and to make adjustments wherever they are needed.
A key purpose of the IRR is to develop ways to scale up or scale down the Retail Aggregation Program according to an area's needs. 

This will help provide the blueprint for making it available to areas that do not necessarily have the same demands as the UP Diliman campus. 

When the IRR is finalized, Retail Aggregation may be offered to a varied set of customers: commercial, industrial, SMEs, and eventually residential areas, giving more Filipinos the option to choose their electricity providers and get the best prices available.

This, according to former ERC Chair and CEO Atty. Agnes VST Devanadera, is a major step towards the 'democratization’ of energy in line with the Electric Power Industry Reform Act of 2001 (EPIRA).

 "So, the idea here is instead of, let us say, 10 individual houses or whatever, magiging isa na lang sila. And then, how will the price go down— the cost go down? With a group, then they can choose [their suppliers]."

(So, the idea here is instead of, let us say, 10 individual houses or whatever, they will be counted as one. And then, how will the price go down— the cost go down? With a group, then they can choose [their suppliers].)

"So, that is why I call this part of the democratization of the energy sector: giving the consumer the right of choice," Devanadera explains.
The Retail Aggregation will also give consumers more power to choose environment-friendly energy sources. 

Devanadera says being able to make bulk purchases from renewable energy suppliers will help encourage consumers to seek out more clean energy. 

Concepcion similarly views the lower electricity costs as an opportunity to reduce U.P.'s use of gas-powered equipment; since electricity is cheaper, they can opt to use electric stoves instead of LPG stoves, for example.

Retail Aggregation. Photo source: ERC
Retail Aggregation. Photo source: ERC

"Meralco is truly honored to be part of the Retail Aggregation pilot implementation. It is a great collaboration among the DU, ERC, and UP Diliman," Meralco Enterprise Vice President and Head Ma. Cecilia M. Domingo said. "Retail aggregation will allow customers to exercise their power to choose. We thank the ERC for their instrumental role in this pilot run. May this project be the first of many initiatives where Meralco can work with the ERC and University of the Philippines to bring innovation and customer empowerment." 
The National Government Team of Meralco Enterprise handles the accounts of U.P. Diliman which has a total of 149 service identification numbers within its campus. 

As of August 26, 2022, 75 services have completed meter installation, gearing up for its commercial run in December 2022. 

The ERC estimates that businesses can save roughly 10%-20% on their power generation costs alone with the help of Retail Aggregation. Having the power to choose their preferred mix of energy suppliers might lead to even more savings.
With the help of Meralco's and U.P. Diliman's pilot program, aggregate customers are said to be empowered to make choices and negotiations that fit their energy needs.

Atty. Agnes VST Devanadera's term as ERC Chairperson expired on July 10, 2022. She was appointed by President Marcos Jr. as president and chief executive officer (CEO) of Clark Development Corporation (CDC) on September 1, 2022.

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