The Energy Regulatory Commission (ERC) has approved the application of FP Island Energy Corporation (FPIEC) to operate a prepaid retail electric service using a prepaid metering system in three off-grid island areas in Camarines Sur—Lahuy and Haponan islands in Caramoan, and Quinalasag Island in Garchitorena—subject to a detailed set of technical, consumer protection, and reporting conditions.

The approval covers FPIEC’s deployment of its advanced metering infrastructure-based prepaid system, which the ERC found technically capable of supporting real-time consumption monitoring, balance updates, remote disconnection and reconnection, and anti-tampering features. The smart meters to be used were also confirmed to be type-approved by the Commission.

However, the ERC imposed strict safeguards ahead of full commercial implementation. These include a mandatory public information campaign for consumers, sealing and ERC testing of meters prior to installation, activation of an overdraft feature equivalent to at least three days of electricity use, and a minimum load purchase amount of PHP 100 per transaction.

FPIEC is also required to conduct a six-month pilot run of the prepaid system. At the end of the trial period, the company must submit a detailed report to the ERC containing customer adoption rates, the number of customers who shift back to postpaid service, system performance indicators, and consumer satisfaction levels. In addition, monthly reports on customer complaints during the pilot period are required.

On subsidies, the ERC did not approve the application of the lifeline rate for the project, citing the current regulatory framework for qualified third parties operating in missionary electrification areas. The Commission also denied FPIEC’s request to be excused from providing itemized unbundled charges, directing the company to continue disclosing customer charges in accordance with existing rules.

The decision also clarifies that the cost of prepaid meters will be treated as a capital expenditure and recovered through FPIEC’s full cost recovery rate, rather than being charged directly to consumers as an upfront fee. The ERC further held FPIEC accountable for service errors arising from third-party vending and telecommunications partners involved in the prepaid system.

For the wider power sector, the ruling formally opens the door for expanded use of prepaid electricity in island and off-grid areas, while signaling that the regulator will enforce full transparency, consumer protection, and performance monitoring even in small and remote systems.

What lessons should distribution utilities, vendors, and policymakers draw from this ERC approval as prepaid electricity expands in off-grid communities? Share your views.

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