For decades, businesses had no choice but to buy power from their local distribution utilities, often facing high and unpredictable costs. Today, thanks to the Retail Competition and Open Access Act (RCOA), businesses have more freedom to choose where to get their power, at what price, and from what energy source—whether renewable, coal, or other options.
RCOA is transforming how energy is managed in the country, turning power from a fixed cost into a strategic asset.
What is RCOA?
An offshoot of the Electric Power Industry Reform Act (EPIRA), RCOA is a policy framework rolled out in 2012, which empowers consumers, particularly large power users, to choose their energy suppliers.
Over the years, this freedom has benefited an increasing number of companies, especially medium-sized enterprises, as the eligibility threshold gradually went down from 1 megawatt (MW) to 750 kilowatts (kW) to 500 kW in 2020.
As the threshold lowered, more businesses gained access to competitive energy rates, helping them reduce electricity costs and increase savings. A 2024 Annual Retail Market Assessment Report by the Philippine Electricity Market Corporation showed that contestable customers—those who can choose their own energy suppliers—pay electricity rates that are, on average, around 14% lower compared to distribution utilities.
Empowering Customers
The benefits and future of RCOA took center stage at the “Strategic Energy Management: Unlocking Savings & Sustainability for Industries” Masterclass held on April 2 at the Asian Institute of Management (AIM). The event, organized by SolX Technologies and AIM, gathered thought leaders from the Energy Regulatory Commission (ERC), retail electricity suppliers (RES), consumers, and SOLX Technologies to discuss strategies for enhancing energy efficiency and sustainability.
Highlighting one of the key achievements of RCOA, Maranatha Estalilla, Energy Regulatory Officer II of the ERC, said the policy framework has opened doors for more businesses to switch to the competitive retail electricity market. “As of January 2025, out of 3,600 eligible end users, around 2,100 have already switched to the competitive retail electricity market. This shift underscores the growing adoption of RCOA as more businesses become aware of the financial benefits of having supplier options,” she said.
The uptake, according to Jacqueline M. Castillo, President and CEO of Mabuhay Energy Corporation, is also largely due to benefits beyond savings and efficiency. The framework, she said, provides customer flexibility and empowerment.
RCOA provides businesses with flexibility by allowing them to choose from various pricing models—such as fixed, variable, or hybrid—based on their risk appetite and energy consumption profile. This approach enables companies to strategically align their energy choices with sustainability goals, including selecting renewable energy suppliers, and empowers them to transform energy from an operational cost into a strategic advantage.
“Pricing and contract structure are now customized for the customer. It’s really dependent on what’s the specific need of your customer. You can even opt for seasonal pricing. You can have your peak season, your off-peak season, and ask for that. In terms of customization, you can even specify what type of technology you want to get. Not only coal, you can even choose a renewable source or just a portion of it,” she said.
Extending RCOA’s Benefits to MSMEs and Households through RAP
The benefits of RCOA are expected to extend to smaller end-users with the recent introduction of the Retail Aggregation Program (RAP). RAP allows communities, villages, and small businesses within the same franchise area to aggregate or pool their electricity demand to meet the 500 kW threshold required to participate in the RCOA market.
For instance, a condominium association can combine the energy consumption of their individual units or common areas to qualify as a single entity. Even MSMEs can aggregate their demand and qualify, allowing them to choose their own retail electricity supplier.
Challenges Amid Progress
Despite achieving significant milestones over the past 12 years, including enabling more Retail Energy Suppliers (RES) like Mabuhay Energy to offer customized and flexible energy solutions, Castillo noted that several challenges still hinder wider adoption of the free market.
One of the main challenges, she said, is the complexity of contracts and pricing structures, which can be particularly daunting for MSMEs. While these small-scale enterprises are now eligible to participate in RCOA and RAP, they often face difficulties in understanding the energy market due to their limited exposure compared to larger companies.
To address this, Mabuhay Energy is shifting from formal, boardroom-style presentations to community-based presentations that are more accessible and relatable for smaller businesses—a strategy Castillo hopes other suppliers will consider to better serve MSMEs.
Another challenge is the complex switching process and the substantial paperwork involved, which can be overwhelming, especially for smaller firms with limited resources.
To help streamline this process, companies like Sol-X Technologies are leveraging digital platforms that offer data transparency and contract management tools, making it easier for businesses to transition to retail competition and maximize their savings.
Matt Levin Tan, COO of SolX Technologies, emphasized that the company works closely with customers to identify their energy requirements and provide tailored solutions. By bridging the gap between end-users and suppliers, SolX ensures that even those unfamiliar with the system can take advantage of RCOA.
Getting the Message Across
The ERC recognizes that one of the key challenges to RCOA adoption is the lack of awareness among end users. To bridge this gap, they have been conducting roadshows and regional engagement activities, particularly in areas like Mindanao, to educate consumers about RCOA and RAP.
“In some regions we see a low participation of consumers primarily because of lack of awareness. Customers need to realize the advantage and they fully understand the program,” Estalilla said.
“We are coordinating and working with DOE, IEMOP. Even Mindanao, pinupuntahan namin (we go there) so that we can communicate and educate all the end users regarding this program, not just the retail aggregation program, but the entire competitive electricity market or the RCOA market,” she added.
By actively engaging with stakeholders, including distribution utilities and local organizations, the ERC aims to make the transition to a competitive electricity market more accessible to both large and small consumers.
As the energy landscape in the Philippines continues to evolve, initiatives like RCOA and RAP pave the way for more flexible and competitive electricity choices. While challenges remain, companies like Mabuhay Energy and SolX Technologies, along with the proactive efforts of the ERC, are making strides in ensuring energy accessibility and sustainability. Continued collaboration and innovation are paving the way for a dynamic, customer-driven energy market.
What do you think about the progress of RCOA and RAP in the Philippines? Share your thoughts in the comments, and follow Power Philippines on Facebook and LinkedIn for the latest updates!
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