Senator Gatchalian Advocates for Expanded Electricity Choice to Boost Savings

MANILA – Senator Win Gatchalian is calling on the Energy Regulatory Commission (ERC) to expedite the reduction of the retail competition and open access (RCOA) threshold, potentially enabling substantial electricity savings for more consumers by broadening market competition.

According to Philippines News Agency, lowering the RCOA threshold from 500 kilowatts to the household level could significantly enhance competition and consumer choice in the electricity market. “This move would promote greater reliability and affordability of electricity, leading to even bigger savings for consumers,” Gatchalian stated in a news release. His comments followed an ERC report indicating that consumers who switched to retail electricity suppliers (RES) had accrued savings of approximately PHP50 billion as of June this year, compared to the same period in 2023.

RCOA is a policy framework established to foster competition in the retail electricity sector by allowing consumers to select their electricity providers independently of their local distribution utilities. Since its inception in June 2013, RCOA has enabled “contestable customers” — those with a monthly average peak demand within a specific threshold — to choose their electricity suppliers.

In March, the ERC set the eligibility threshold for participation in the retail market at an average monthly peak demand of at least 500 kilowatts, aligning with existing thresholds in Luzon and Visayas. The commission is currently contemplating a reduction of this threshold to 100 kWh per month, which would allow a broader range of consumers to benefit from the program.

Gatchalian emphasized the potential impact of this policy change: “Lowering the threshold will allow more consumers the flexibility to switch suppliers, thereby enhancing the competitiveness of local businesses and supporting economic growth.” He also urged the ERC to facilitate the process of switching suppliers to minimize difficulties for consumers and other market stakeholders.

“It is time to widen the reforms in the industry that will make electricity bills more affordable,” Gatchalian added, highlighting the broader implications of such regulatory changes on economic and consumer welfare.