Lower power threshold delivers savings

Businesses shifting to their preferred electricity suppliers are already reaping savings following the Energy Regulatory Commission’s (ERC) decision to lower the contestability threshold to 100 kilowatts in June.

ERC Chief Energy Regulation Officer for the Contestable Market Division Chiara Blanco said 8,674 residential groups, industrial firms and commercial establishments had switched to the system as of end-August.

Another 12,491 customers could benefit from the expanded eligibility, which allows qualified electricity users to directly negotiate supply arrangements with their preferred retail electricity suppliers.

One early beneficiary is Villa Escudero, an 800-hectare coconut plantation and cultural resort in Tiaong, Quezon, which turned to solar energy provider Corenergy to facilitate its switch without service disruption or upfront costs.

Manuel Escudero, the resort’s director of management services, said the move initially appeared too good to be true after its monthly electricity bill dropped by ₱300,000 in the first month. Subsequent bills, however, confirmed that the savings were consistent.

Corenergy President Francis del Val said lower electricity costs provide significant relief to businesses grappling with inflation, rising diesel prices and broader economic pressures.

Blanco said the expanded contestability threshold marks another step in implementing the Electric Power Industry Reform Act of 2001, which gradually widened access to retail electricity competition. The threshold was lowered to one megawatt in Luzon and Visayas in 2013, 750 kilowatts in 2016, 500 kilowatts in 2021 and finally 100 kilowatts in June 2026.

Under the system, eligible businesses can negotiate electricity prices, contract durations and risk terms with their chosen suppliers. They may also access renewable energy-backed supply or combine their electricity demand with other businesses through the Retail Aggregation Program.

To switch, interested establishments must first coordinate with their distribution utility to verify their eligibility and then contact an accredited retail electricity supplier to arrange the necessary contracts.

The ERC said the long-term goal is to expand consumer choice further, eventually allowing even households to select their electricity suppliers regardless of consumption level.