The Energy Regulatory Commission of the Philippines activated its long-planned contestability threshold reduction on June 26, 2026, opening the Retail Competition and Open Access framework and the Retail Aggregation Program to consumers with an average monthly peak demand of 100 kilowatts, down from the previous 500-kilowatt floor, potentially drawing approximately 12,000 additional business accounts into a competitive retail electricity market for the first time.
Key Facts At A Glance
- The new 100 kW contestability threshold took effect on June 26, 2026, under ERC Resolution No. 22, Series of 2025
- The threshold applies to both RCOA and the Retail Aggregation Program (RAP); it aligns RCOA with the existing Green Energy Option Program (GEOP) floor
- Approximately 12,000 additional Philippine businesses are estimated to become newly eligible to choose their electricity supplier
- As of 2025, over 2,300 customers had switched under RCOA; 37 Retail Aggregated Groups (RAGs) held a combined demand of 31 MW
- As of effectivity on June 26, 77 contestable customers had been scheduled for RCOA switch; 11 Retail Aggregated Groups in Luzon were covered
- An eight-month transition period was granted to distribution utilities (DUs) and Retail Metering Service Providers (RMSPs) to install Advanced Metering Infrastructure (AMI)
- ERC is coordinating with the DOE and IEMOP on billing, registration, and settlement system updates to accommodate the expanded participant base
- A Comprehensive Roadmap will outline the phased rollout of RCOA, RAP, and GEOP toward eventual household-level participation
The Energy Regulatory Commission activated one of the most consequential reforms to the Philippine retail electricity market in years on June 26, 2026, lowering the contestability threshold from 500 kilowatts to 100 kilowatts of average monthly peak demand. The change opens the Retail Competition and Open Access framework and the Retail Aggregation Program to a class of medium-sized commercial and industrial consumers who have until now been locked into fixed supply arrangements with their local distribution utilities.
What The Threshold Change Means
Under the Philippine electricity market structure established by the Electric Power Industry Reform Act of 2001 (EPIRA), contestable customers are those who meet a minimum demand threshold and are therefore eligible to choose their electricity supplier rather than being assigned one through their distribution utility. The reform enacted by ERC Resolution No. 22, Series of 2025, and effective June 26, 2026, extends that right to consumers averaging at least 100 kW of monthly peak demand, a bracket that encompasses mid-sized manufacturers, schools, commercial buildings, cold storage operators, and business process outsourcing facilities.
The new threshold mirrors the floor already in place under the Green Energy Option Program (GEOP), which since its earlier implementation had allowed consumers at the 100 kW level to contract directly for renewable energy supply. Aligning RCOA with GEOP removes a structural inconsistency: a consumer could already access green retail supply at 100 kW but could not enter the broader competitive retail market at the same demand level. That gap has now closed.
Retail electricity suppliers in the Philippines, licensed by the ERC, buy power from generators and sell it to contestable customers under customized supply contracts, unbundling the supply function from distribution. The Retail Aggregation Program provides an alternative pathway for consumers who do not individually reach the threshold: multiple end-users may aggregate their collective demand under a single Retail Aggregated Group and be treated as one contestable customer. Separate locations belonging to the same or affiliated entities may be consolidated.
Transition Architecture And Market Readiness
The ERC granted an eight-month transition period from its November 2025 approval of the resolution to the June 26, 2026 effectivity date to give distribution utilities and Retail Metering Service Providers time to procure and deploy Advanced Metering Infrastructure compliant with ERC technical and cybersecurity standards. AMI is required for RCOA participation because competitive billing and settlement depend on interval metering data that standard utility meters do not capture.
The commission is coordinating with the Department of Energy and the Independent Electricity Market Operator of the Philippines on system updates to the Central Registration and Settlement System to ensure billing, registration, and customer switching can be processed at higher volume. The IEMOP’s 2026 Market Outlook projects that renewable energy will account for nearly 50% of the generation mix by the time the new threshold took effect, a context that strengthens the strategic value of competitive supplier access for businesses seeking to lock in green tariffs or fixed-rate contracts ahead of seasonal demand spikes.
ERC Chairperson and CEO Atty. Francis Saturnino C. Juan described the change as a milestone in the implementation of EPIRA, framing it as a step toward consumer choice rather than purely a competition measure. The commission has committed to publishing a Comprehensive Roadmap outlining the phased progression of RCOA, RAP, and GEOP toward eventual household-level contestability, though no timeline for that final phase has been specified.
Initial Uptake And Market Context
As of effectivity on June 26, 77 contestable customers had been formally scheduled for RCOA switch, and 11 Retail Aggregated Groups in Luzon were included under RAP coverage. Both figures are early indicators of market appetite among the first wave of newly eligible consumers who had prepared their letters of intent within the advance scheduling window.
The broader baseline against which these initial numbers sit is modest: over 2,300 customers had switched under RCOA as of 2025, and 37 existing RAGs held a combined demand of only 31 MW. The limited uptake to date reflects both the higher prior threshold and the administrative burden of the switching process. Industry projections of approximately 12,000 newly eligible businesses represent a potential market expansion of several multiples, though conversion rates will depend on AMI readiness across individual distribution utility service areas, the commercial competitiveness of available retail electricity supply contracts, and the pace at which the ERC’s comprehensive roadmap addresses remaining implementation gaps.
The threshold reform carries additional significance in the context of the current energy emergency. With Meralco and other distribution utilities passing through elevated generation costs following the Strait of Hormuz disruption, mid-sized commercial consumers now have a direct regulatory pathway to negotiate supply contracts with retail electricity suppliers, potentially accessing pricing structures that depart from the default pass-through arrangements embedded in standard distribution utility supply agreements.