ECCP@Work

A Paradigm Shift in the Philippine Power Industry

September 16, 2020 ECCP@Work



The power industry is shaping and shifting to a more competitive landscape. In June 2001, the government enacted the Electric Power Industry Reform Act (EPIRA) to ensure transparent and reasonable prices of electricity under a regime of free and fair competition and to give end users a more empowered choice. 

Part of EPIRA is the establishment of the Retail Competition and Open Access (RCOA) scheme that aims to build a competitive retail electricity market which paved the way for Retail Electricity Suppliers (RES). The RCOA established the ‘Competitive Market’ wherein qualified end-users, called Contestable Customers, can contract the services of their preferred RES. Contestable Customers are defined as end-users who meet the prevailing minimum average demand for contestability, which currently is at 750 kW. Those who fall below this contestability threshold continue to be part of the Captive Market and are still directly supplied by their respective Distribution Utility (DU). Eventually, the competitive market will encompass all consumers, including those in the household level. 

RES are entities authorized by the Energy Regulatory Commission (ERC) to sell, broker, market, or aggregate electricity to qualified Contestable Customers. RES could be a Local Retail Electricity Supplier, like MPower, which operates within the franchise area of its DU, or a licensed RES, like Vantage Energy, which is an affiliate RES of MPower and can operate nationwide where RCOA is in effect. The RES contracts with various generation companies for the supply of electricity for their customers. For growing commercial and industrial businesses with increasing power consumption, switching to the competitive market may translate to savings. RES allow more flexibility in the contract terms as each offer is customized and considers the unique consumption behavior of the customer. Knowing the differences between being in the captive and competitive market can help you discern which setup will be more beneficial for your business.

MPower, as the supplier of choice, can help you maximize your growth potential through its competitive pricing products and value-added services. For more information on MPower, visit www.mpower.com.ph.