ERC eyes full power retail competition by 2031
The Philippine electricity market could open to all consumers, including households, by 2031 under a proposed five-year roadmap that would expand competition among power suppliers and give more customers the freedom to choose where they buy electricity.
The Energy Regulatory Commission (ERC) is proposing to gradually lower the eligibility threshold under Retail Competition and Open Access (RCOA) from the current 100 kilowatts (kW) to 50 kW in 2027 and 30 kW in 2030 before removing the threshold entirely by 2031.
The move would open a much larger market for retail electricity suppliers while requiring distribution utilities to accelerate smart meter installations and prepare for customers shifting to competing providers.
In its 23 October notice, the ERC announced the release of its draft Comprehensive Roadmap for Customer Choice Programs in the Retail Market for 2027 to 2031.
The proposal follows the reduction of the eligibility threshold from 500 kW to 100 kW in June this year, which made around 12,000 additional electricity consumers eligible to choose their suppliers.
As of August, 2,692 customers had switched suppliers under RCOA.
Under the roadmap, distribution utilities would be required to submit smart meter rollout plans by the fourth quarter of 2027, while accredited third-party companies would be allowed to compete in providing metering services.
The Independent Electricity Market Operator of the Philippines would also establish a centralized metering data hub to simplify customer switching and standardize electricity consumption data.
Competitive metering services are targeted for 2028, followed by residential aggregation pilot programs in 2029.
By 2031, households with compliant smart meters registered in the centralized system could choose their electricity supplier or remain under regulated default supply.
However, opening the market to more consumers could leave distribution utilities facing billions of pesos in stranded power supply contracts as customers shift to other providers.
The ERC estimated that lowering the threshold to 50 kW in 2027 could expose utilities to as much as P56.01 billion in annual stranded contract costs, potentially rising to P77.06 billion under full retail competition in 2031.
These figures represent hypothetical gross exposure before mitigation measures, rather than actual projected losses.
To manage these risks, the ERC is proposing contract transition plans and safeguards to prevent stranded costs from being automatically passed on to remaining customers.
The regulator also stressed that further market opening would depend on the readiness of metering systems, consumer protection measures and market infrastructure.
The ERC has given industry players and other stakeholders until October 30 to submit comments on the proposal, with public consultations scheduled for 5 November in Luzon and 6 November for Visayas and Mindanao.
“All comments received by the Commission within the prescribed period shall form part of the records of this rulemaking proceeding and shall be considered in the finalization of the Resolution,” the ERC said in its notice.