ERC eyes lower open access threshold as early as 2027

MANILA, Philippines — Qualified electricity end-users consuming at least 100 kilowatt hours (kWh) a month may soon be allowed to choose their power suppliers amid plans to lower the open-access threshold as early as 2027.

The Energy Regulatory Commission (ERC) is continuing its efforts to fast-track the implementation of the lower retail competition and open access (RCOA) threshold, its chairman and CEO, Monalisa Dimalanta, said.

RCOA, regulated by the ERC, is a framework designed to promote competition in the retail electricity market, allowing power end-users to choose their electricity providers.

Dimalanta said their “goal” is to expand the RCOA coverage and reduce the threshold to 100kW from 500kW a month, but noted that a thorough study is still being conducted before moving forward with the plan.

“That’s our goal, but how soon and how we will design the lowering of the threshold – that’s what we need to study. Actually, we’ve been studying it, so that’s what we need to formalize,” Dimalanta said.

Under the prevailing threshold, only consumers with an average monthly peak demand of at least 500kW for the preceding 12 months are eligible to contract with any authorized electricity supplier on a voluntary basis.

According to Dimalanta, they are eyeing to lower the RCOA threshold in the next “three to four years.”

“We want to announce it ahead of time so that DUs (distribution utilities) can also prepare because I think the biggest impact would be on the DUs because their captive customer base will be shifting to the contestable,” she added.

Captive end-users are those who do not have the flexibility to choose their electricity suppliers and are usually bound to purchase power from a local DU.

With more consumers migrating from captive to the contestable market, the increased competition among power suppliers is expected to lower electricity rates.

RCOA was first implemented in 2013 for large power consumers with a minimum monthly consumption of one megawatt. The threshold was set at 750kW in 2016 and further reduced to 500kW in 2020.

The ERC earlier said the adoption of a new threshold is consistent with the objectives of the Electric Power Industry Reform Act, which seeks to ensure consumer choice with greater participation in the RCOA.