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ERC Cuts Power Market Threshold to 100 kW — But the Bigger Test Is Whether Competition Will Actually Lower Electricity Bills

ERC Cuts Power Market Threshold to 100 kW — But the Bigger Test Is Whether Competition Will Actually Lower Electricity Bills

MANILA — Thousands more Philippine businesses can now shop around for their electricity supplier after the Energy Regulatory Commission lowered the threshold for Retail Competition and Open Access to just 100 kilowatts, one of the biggest expansions of consumer choice since the country’s power sector was restructured more than two decades ago.

The rule took effect on:

June 26, 2026.

The old eligibility threshold was:

500 kW.

The new threshold is:

100 kW average monthly peak demand.

That means many medium-sized businesses that previously had no choice but to buy electricity through their local distribution utility can now directly negotiate with:

Retail Electricity Suppliers, or RES.

The move potentially changes the electricity economics of thousands of:

Restaurants

Hotels

Hospitals

Schools

Office buildings

Supermarkets

and

Manufacturing facilities.

But the biggest question remains:

Will more competition actually translate into materially lower power bills?

THE THRESHOLD HAS BEEN CUT BY 80%

The scale of the change is easy to underestimate.

A customer previously needed at least:

500 kW

of average monthly peak demand to qualify directly for the competitive retail market.

That requirement has now fallen to:

100 kW.

That is an:

80% reduction.

For the first time, many medium-sized establishments can participate directly without needing the electricity demand of a large factory or mall.

That dramatically widens the contestable market.

WHAT DOES 100 KW LOOK LIKE IN THE REAL WORLD?

A 100-kW electricity demand is not a giant industrial load.

Industry examples suggest it can correspond to businesses such as:

A 300- to 400-square-meter restaurant

or

A grocery or supermarket around 500 to 1,000 square meters.

It can also cover:

Medium-sized offices

Hotels

Medical facilities

and

Small manufacturing operations.

That means the policy is no longer aimed only at major corporations.

It increasingly reaches ordinary Philippine SMEs.

THIS IS WHAT “CONTESTABLE CUSTOMER” ACTUALLY MEANS

A contestable customer can choose who supplies the electricity it buys.

That does not mean disconnecting from the local distribution utility.

The wires still belong to the:

Distribution Utility, or DU.

The DU still delivers electricity physically.

But the customer can separately choose:

who sells the electricity itself.

That distinction is crucial.

The distribution network remains regulated.

The energy supply becomes competitive.

CUSTOMERS CAN NOW SHOP FOR A BETTER ELECTRICITY CONTRACT

Instead of automatically accepting the generation cost passed through by the local utility, eligible businesses can negotiate with licensed Retail Electricity Suppliers.

They may compare:

Price

Contract length

Fuel mix

Payment terms

Price protection

and

Renewable-energy options.

In theory, competition forces suppliers to offer better terms.

A business that receives an expensive quotation from one supplier can approach another.

That is the central idea behind Retail Competition and Open Access.

THE ERC CALLS THIS THE “POWER OF CHOICE”

The Energy Regulatory Commission describes the change as a major consumer milestone.

The regulator’s position is straightforward.

More supplier choice should create:

Stronger competition

Better service

More innovative contracts

and potentially

Lower electricity costs.

But the word:

potentially

matters.

Competitive markets do not automatically guarantee lower bills every month.

POWER PRICES STILL DEPEND ON THE WHOLESALE MARKET

Retail suppliers must still obtain electricity somewhere.

Their costs are influenced by:

Power plant fuel prices

Wholesale Electricity Spot Market prices

Transmission charges

and

Generation availability.

When coal, natural gas or oil becomes expensive, retail electricity suppliers cannot completely escape those costs.

Competition can improve procurement.

It cannot eliminate energy-market fundamentals.

THIS MEANS BUSINESSES MUST COMPARE CONTRACTS CAREFULLY

The cheapest headline price may not always be the best contract.

Businesses need to examine:

Fixed versus variable pricing

Pass-through charges

Contract duration

Early termination penalties

and

Minimum demand requirements.

A fixed-price contract can protect a company when wholesale prices surge.

But it can look expensive if market prices fall.

A floating contract can provide savings when electricity is cheap.

But it also exposes the customer to spikes.

RCOA HAS BEEN EXPANDING GRADUALLY FOR YEARS

The Philippines did not open retail electricity competition all at once.

The process has been gradual.

When RCOA first became operational in:

2013,

the threshold was around:

1 megawatt.

It later fell to:

500 kW.

Now it has dropped to:

100 kW.

That shows the government’s long-term direction.

More electricity customers are gradually being moved from:

captive purchasing

toward

consumer choice.

THE POLICY COMES FROM EPIRA

The legal foundation is the:

Electric Power Industry Reform Act of 2001, or EPIRA.

EPIRA reorganized the Philippine electricity sector.

Among its goals were:

Competition

Private investment

Consumer choice

and

Transparent electricity markets.

Retail Competition and Open Access is one of the most important unfinished pieces of that reform.

More than two decades later, the market is still gradually opening.

THE 100-KW RULE IS THE FOURTH MAJOR PHASE

InsiderPH describes the latest expansion as another major phase in RCOA implementation.

Every reduction in the threshold increases the number of eligible customers.

The jump from:

500 kW

to

100 kW

is particularly significant because it brings a much larger group of businesses into the market at once.

This is where retail competition stops being only a large-corporate issue.

It starts becoming an SME issue.

SMALLER CONSUMERS HAVE ANOTHER OPTION: AGGREGATION

What happens if a business uses less than:

100 kW?

It may still have a pathway through the:

Retail Aggregation Program, or RAP.

Under RAP, multiple electricity users can combine their demand into a:

Retail Aggregated Group.

That group’s combined demand can then qualify for the competitive retail market.

This is particularly useful for:

Small businesses

Commercial buildings

and potentially

Groups of households.

AGGREGATION COULD MAKE SMALL CONSUMERS MORE POWERFUL

Electricity procurement follows the same logic as many other markets.

Large buyers often receive better terms.

A single small business may have limited negotiating power.

But if dozens of businesses combine demand, the group becomes more attractive to suppliers.

That can create:

Volume discounts

and

More competitive offers.

RAP essentially allows smaller consumers to negotiate like a larger customer.

THERE ARE RULES AROUND WHO CAN AGGREGATE

Aggregation is not completely unrestricted.

Customers generally need to comply with:

Eligibility rules

Metering requirements

and

Switching procedures.

There were also transition rules for groups formed under the previous 500-kW threshold.

The ERC issued clarificatory guidance shortly after the 100-kW rule took effect to ensure that pending applications were handled consistently.

That shows how complicated the transition can be operationally.

RETAIL METERING IS A CRITICAL PIECE

Competitive electricity markets require accurate measurement.

That means distribution utilities must register as:

Retail Metering Services Providers.

The ERC has been pushing utilities to complete that registration.

As of April 2026, several distribution utilities across:

Luzon

Visayas

and

Mindanao

had not yet completed registration.

That is one example of why market reform involves more than simply changing a threshold.

The physical and administrative systems must also work.

THE ERC HAS WARNED UTILITIES TO COMPLY

The regulator has reminded distribution utilities that failing to register properly can trigger:

sanctions.

Why is that important?

Because customers cannot easily switch suppliers if:

Metering

billing

and

settlement systems

are not ready.

Competition requires reliable infrastructure underneath it.

Otherwise, a legal right to choose exists only on paper.

RETAIL ELECTRICITY SUPPLIERS NOW HAVE A MUCH BIGGER MARKET

The rule is also important for suppliers.

Before June 26, the number of customers they could compete for was limited.

Now thousands more businesses could become potential clients.

That should intensify competition among:

Retail Electricity Suppliers.

The ERC maintains a list of licensed suppliers operating in the competitive retail market.

These include companies affiliated with major Philippine energy groups.

ENERGY COMPANIES WILL NOW COMPETE HARDER FOR SMEs

This is likely to change sales strategies.

Retail suppliers previously focused heavily on:

Factories

Malls

Large offices

and

Industrial estates.

The new market includes smaller accounts.

Suppliers may therefore build products specifically for:

Restaurants

Hotels

Schools

Warehouses

and

SMEs.

That could lead to more standardized contracts and digital onboarding.

VIVANT’S CORENERGY IS ONE OF THE PLAYERS PUSHING THIS MARKET

The October 8 forum highlighted by InsiderPH was organized with:

COREnergy Inc.

the retail electricity arm of:

Vivant Energy.

COREnergy is one of several companies looking to capture the newly expanded contestable market.

Its presence illustrates how power companies increasingly see retail supply as a growth opportunity.

As the threshold falls, the potential customer pool increases dramatically.

RENEWABLE ENERGY COULD BECOME PART OF THE SALES PITCH

Price will not be the only area of competition.

Some businesses want to reduce their:

Carbon footprint.

Retail electricity suppliers can differentiate themselves through:

Renewable-energy sourcing

and

Green contracts.

The Philippines also has the:

Green Energy Option Program, or GEOP.

GEOP allows eligible customers to source electricity from renewable-energy suppliers.

That creates another route for businesses seeking cleaner power.

MULTINATIONAL COMPANIES MAY PUSH SUPPLIERS TOWARD CLEANER ENERGY

Large international corporations increasingly have:

Net-zero targets

and

Renewable-energy commitments.

Their Philippine suppliers may also be asked to reduce emissions.

That can create pressure on:

Factories

Warehouses

and

Service companies

to buy cleaner electricity.

For some businesses, choosing a supplier may therefore become part of:

ESG compliance

and

global supply-chain competitiveness.

POWER COSTS REMAIN ONE OF THE PHILIPPINES’ BIGGEST BUSINESS PROBLEMS

This reform matters because electricity is a major operating expense.

The Philippines has historically had relatively high power costs compared with several regional competitors.

For businesses, high electricity prices affect:

Profit margins

Expansion decisions

and

Competitiveness.

Manufacturing is particularly sensitive.

Every peso saved per kilowatt-hour can become significant when multiplied across large monthly consumption.

EVEN A SMALL PRICE DIFFERENCE CAN BECOME BIG MONEY

Consider a business consuming:

100,000 kWh per month.

A reduction of:

₱0.50 per kWh

would save:

₱50,000 per month.

That becomes:

₱600,000 per year.

A reduction of:

₱1 per kWh

would double those savings.

That is why businesses should take the new supplier-choice opportunity seriously.

Electricity procurement can become a strategic financial decision.

BUT SAVINGS WILL NOT BE THE SAME FOR EVERY CUSTOMER

Some customers may see large savings.

Others may see little difference.

The outcome depends on:

Location

Load profile

Consumption timing

Contract terms

and

Wholesale market conditions.

A business operating heavily during peak-demand hours may face different economics from one consuming electricity overnight.

Retail suppliers price that risk differently.

THE CUSTOMER’S LOAD PROFILE NOW HAS VALUE

Under a captive arrangement, many customers rarely think about how suppliers value their electricity use.

In a competitive market, consumption patterns matter.

A customer with:

Stable predictable demand

can be attractive to a supplier.

Predictability makes electricity procurement easier.

A highly volatile customer can create more risk.

Businesses that understand their own:

load profile

may negotiate better contracts.

ENERGY MANAGEMENT COULD BECOME MORE IMPORTANT

The 100-kW threshold may also encourage businesses to pay closer attention to electricity consumption.

Companies could invest in:

Smart meters

Energy-management software

Solar panels

Battery storage

and

Efficiency upgrades.

Why?

Because once electricity becomes actively procured rather than passively billed, management has more reason to optimize usage.

The reform could therefore create a broader energy-efficiency market.

SOLAR COULD BE COMBINED WITH RETAIL SUPPLY

A commercial customer might use:

Rooftop solar

during daytime hours

and

Retail electricity supply

for the remaining demand.

That combination can reduce exposure to grid prices.

Battery storage could eventually add another layer.

Businesses could store lower-cost electricity and use it during:

peak periods.

This is how electricity procurement is evolving globally.

The Philippines is moving in the same direction.

DISTRIBUTION UTILITIES DO NOT DISAPPEAR

This point deserves repeating.

Choosing a retail supplier does not mean leaving:

Meralco

or another distribution utility’s network.

The DU still operates the:

wires

poles

meters

and

local distribution system.

The customer still pays regulated network charges.

What changes is the supplier responsible for the:

generation component.

This is similar to choosing an internet content provider while still relying on physical infrastructure.

THAT MEANS NOT EVERY PART OF THE BILL BECOMES COMPETITIVE

Electricity bills contain multiple components.

These can include:

Generation

Transmission

Distribution

Taxes

and

Other regulated charges.

Retail competition primarily affects the:

electricity supply portion.

A lower generation price does not eliminate:

network charges

or

government-imposed fees.

Businesses should therefore compare the total bill impact rather than focusing only on the advertised energy rate.

CONTRACT TRANSPARENCY WILL BE CRUCIAL

As more SMEs enter the market, consumer protection becomes more important.

Large corporations often have:

procurement teams

and

lawyers

to review energy contracts.

Smaller businesses may not.

The ERC therefore needs clear rules around:

Disclosure

Billing

Switching

and

Contract terms.

Otherwise, competition could become confusing instead of empowering.

SUPPLIER FAILURE IS ALSO A RISK

Competitive electricity markets elsewhere have experienced situations where retail suppliers:

failed

or

became insolvent.

That can happen when suppliers promise fixed prices but wholesale electricity costs suddenly surge.

Philippine rules need mechanisms to protect customers if a supplier encounters financial trouble.

The cheapest supplier is not always the safest supplier.

Financial strength matters.

BUSINESSES SHOULD LOOK AT MORE THAN PRICE

When evaluating a Retail Electricity Supplier, businesses should consider:

Track record

Financial stability

Customer service

Contract flexibility

and

Energy sourcing.

A slightly cheaper contract can become expensive if:

billing problems

or

operational disputes

occur.

Electricity is essential infrastructure.

Reliability matters as much as savings.

THE NEXT STEP MAY BE BELOW 100 KW

The ERC is already preparing for that possibility.

In March, the regulator required Network Service Providers to begin submitting information on customers with demand between:

50 kW

and

100 kW.

The purpose is to prepare for further lowering of the eligibility threshold.

That is a strong signal.

The 100-kW level may not be the final destination.

EVENTUALLY, HOUSEHOLDS COULD GET SUPPLIER CHOICE TOO

The ERC has explicitly referred to preparing for threshold reductions:

up to the household level.

That would be transformative.

A residential customer could eventually choose among electricity suppliers much as consumers choose:

Mobile networks

or

Internet providers.

That is still a future possibility rather than today’s system.

But the direction is clear.

Retail competition is moving toward a broader consumer market.

HOUSEHOLD COMPETITION WOULD CHANGE THE INDUSTRY COMPLETELY

If millions of residential customers eventually become contestable, suppliers would need:

Mass-market brands

Apps

Customer-service systems

and

Simple pricing plans.

They might offer:

Fixed-price electricity

Green-energy packages

or

Bundles with solar and storage.

The electricity market would start looking much more like:

telecommunications.

That could become one of the largest structural changes in Philippine power.

BUT THE SYSTEM MUST PROVE ITSELF AT 100 KW FIRST

Before regulators go further, the current phase needs to work.

The ERC will need to track:

Customer switching

Price outcomes

Supplier competition

Billing complaints

and

Market concentration.

If customers actually save money and switching works smoothly, there will be a stronger case for further liberalization.

If problems emerge, regulators may slow down.

THE BIGGER STORY: PHILIPPINE BUSINESSES ARE FINALLY GETTING MORE POWER OVER THEIR POWER

For years, electricity has been treated by many businesses as a:

fixed operating cost.

The bill arrives.

The company pays it.

There is little negotiation.

The 100-kW threshold begins changing that mindset.

More businesses can now treat electricity like:

a contract that can be negotiated.

They can compare suppliers.

They can choose renewable options.

They can lock in prices.

They can aggregate demand.

And they can incorporate power procurement into broader:

cost management.

That is the real significance of the ERC’s decision.

The regulatory change itself is simple:

500 kW became 100 kW.

But the economic effect could be much larger.

It expands competition from a relatively small group of large electricity users toward thousands of medium-sized businesses across the Philippines.

The next test is whether suppliers respond with:

better pricing

better service

and

better products.

Because consumer choice only becomes meaningful when choosing actually produces a better outcome.

The ERC has opened the competitive power market to thousands more Philippine businesses — but the success of the reform will ultimately be measured not by how many customers are allowed to switch, but by how much money they actually save when they do.

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