Local energy market liberalizes further as ERC expands retail competition

Atty. Francis Saturnino “Nino” Juan

Electricity consumers are set to break away from traditional utility monopolies next week, as regulators lower the threshold for market contestability to let households and small businesses choose their own power suppliers.

Starting June 26, the Energy Regulatory Commission (ERC) will reduce the minimum demand requirement in the retail electricity market to 100 kilowatts of average monthly peak demand from the previous 500 kilowatts.

ERC said the new policy will allow an initial wave of 142 end-users—including mid-sized manufacturers, commercial establishments, and neighborhood clusters—to negotiate customized energy contracts and save thousands of pesos on their electricity bills.

Energy Regulatory Commission Chairperson Francis Saturnino Juan said the transition was driven by years of regulatory adjustments and infrastructure upgrades.

“Since 2020, the ERC has been preparing the market for the expansion of retail competition,” Juan told the Manila Bulletin.

He noted that regulators, distribution utilities, and electric cooperatives have been laying the groundwork for the threshold reduction long before the final rollout.

Consumers meeting the new 100-kilowatt demand requirement were instructed to submit their letters of intent to their respective distribution utilities by Jan. 30. The submissions include 142 customers under the Customer Choice Programs who are scheduled to officially switch providers on June 26.

Juan said the pioneer group includes residential customers forming Retail Aggregated Groups. These organizations allow neighborhood households to pool their monthly electricity demand to collectively hit the newly mandated 100-kilowatt level, empowering them to bypass standard utility rates.

To facilitate the transition, distribution utilities have been required to install advanced digital meters for the newly qualified participants.

Juan emphasized that meters for customers who submitted letters of intent should have been replaced at least 30 days prior to the target switch date.

Utilities are also mandated to implement strict measures to manage displaced or stranded contracted capacities, ensuring that remaining captive customers who are not part of the switch are protected from sudden rate increases in their monthly utility bills.

The Independent Electricity Market Operator of the Philippines has upgraded its trading and registration systems to securely handle the expected surge in retail consumer participation. The modernization effort aligns with a broader government strategy to digitize and liberalize the national grid.

“With the 100-kilowatt rollout, consumers can finally look forward to customized energy contracts, greener power options, and massive savings on their monthly bills,” Juan said. He added that the ongoing infrastructure upgrades by distribution utilities are bringing the entire grid into the modern era.

The ERC is currently amending the Omnibus Rules for Customer Choice Programs. The revised guidelines aim to provide a more convenient, expedited, and seamless transition for end-users seeking to negotiate directly with retail electricity suppliers.

By opening the market, officials expect enhanced competition to drive down electricity costs across the board.

“We strongly encourage all newly eligible consumers to exercise their power of choice,” Juan said. “Talk to licensed suppliers, demand the best rates, and take full control of the energy future.” — Gabriell Christel Galang