Businesses across the Philippines are constantly looking for ways to manage costs and improve efficiency. One of the most impactful developments in the local energy landscape that supports this goal is Retail Competition and Open Access (RCOA).
But what exactly is RCOA in the Philippines, and how does it work? More importantly, what can it do for companies that want better control over their electricity supply?
This guide breaks down RCOA for companies in the Philippines, explains its meaning, and highlights its benefits for businesses of all sizes.
RCOA, short for Retail Competition and Open Access, is a policy under the Electric Power Industry Reform Act (EPIRA) of 2001, designed to open the Philippine electricity market to competition.
In simpler terms, it gives qualified electricity users, called contestable customers, the freedom to choose their electricity supplier instead of relying solely on their local distribution utility.
Under the traditional setup, businesses could only purchase electricity from one provider in their area. With RCOA, eligible companies now have the power to choose which Retail Electricity Supplier (RES) best fits their needs in terms of pricing, contract structure, and even energy source.
The goal is straightforward: to create a competitive market that drives stronger pressure on pricing and service quality, while empowering businesses to take control of their energy use.
The introduction of Retail Competition and Open Access in the Philippines was a major step toward energy reform. Before RCOA, electricity consumers, especially commercial and industrial ones, had limited flexibility. Prices were set by distribution utilities, and customers had little to no negotiating power.
RCOA was introduced to change that dynamic by achieving three main objectives:
By promoting a more open and competitive environment, RCOA aims to make electricity pricing more transparent and reflective of true market conditions.
Not every customer can immediately participate in the RCOA market. Eligibility depends on electricity consumption levels.
At present, contestable customers are those with an average peak demand of at least 500 kilowatts (kW) over the past 12 months. These are typically larger industrial plants and manufacturing companies, or commercial office buildings and retail chains.
However, the Energy Regulatory Commission (ERC) has been gradually lowering the threshold to include smaller businesses. In the next few years, companies with 100 kW average demand are expected to gain access to the RCOA market as well.
This step-by-step rollout ensures that the transition is smooth and that more businesses can benefit from competition in the long term.
The advantages of joining the RCOA program go beyond simple cost savings. Businesses that shift to retail competition enjoy several strategic and operational benefits.
When multiple electricity suppliers compete for business, they are motivated to negotiate better generation rates, which they, in turn, can pass on to customers. Some contestable customers report paying as much as 10 to 15% less than those under traditional distribution utilities.
Through open access, companies can request proposals from various suppliers and select the plan that best suits their needs in balancing pricing, tariff type, and tariff structure, and wider energy services.
Businesses have the freedom to choose the type of pricing model that suits their operations and business preferences, for example, whether it’s fixed-rate, time-of-use, or hybrid.
A manufacturer with steady electricity usage may prefer a fixed-rate plan for predictability, while a retail chain that operates mainly during the day could benefit from time-of-use pricing.
Switching to a new electricity supplier under RCOA does not disrupt the physical supply of electricity. Companies continue to get their power from the same DU and along the same distribution lines; they now simply have the ability to source their energy from a different supplier. This ensures a seamless transition without any operational downtime.
Many Retail Electricity Suppliers now offer renewable or mixed energy sources as part of their portfolio. This allows companies to balance their pricing requirements with their sustainability goals or ESG initiatives.
Open competition encourages suppliers to be transparent about pricing and contract terms. Businesses may gain better access to detailed consumption data, allowing for smarter energy management and more informed decisions.
The transition to RCOA is a structured yet straightforward process. For companies that meet the eligibility criteria, the following steps outline how to participate:
The Department of Energy (DOE) and Energy Regulatory Commission (ERC) oversee the process to ensure fairness, reliability, and transparency in all transactions.
RCOA for companies in the Philippines is more than a regulatory reform; it’s a strategic advantage. By actively managing their electricity procurement, businesses can turn what was once an inflexible cost into a controllable and optimizable expense.
Lower electricity costs translate to improved profitability or allow for investment allocation, while flexible energy sourcing can support greater operational stability or further business initiatives.
Early adopters of RCOA also gain experience in negotiating and managing energy contracts, giving them an edge when the market eventually opens to more participants.
See below real-life scenarios with three types of companies and how RCOA can make a difference for each. Whether it’s a manufacturing firm managing high energy demands, a commercial establishment balancing cost and comfort, or a small business partnering with other businesses to qualify for the RAP, RCOA empowers every business to make smarter, more strategic energy choices.
A manufacturing facility with a steady demand of > 1 MW is a textbook ‘contestable customer’. Under RCOA, this plant negotiates directly with a RES for a fixed-price contract for 3 years, secures better economics, and gains access to energy-performance services from the supplier.
Result: lower energy generation cost, improved predictability in budget, ability to align power sourcing with the ability to measure energy consumption, and optimize for efficiency and energy conservation.
Suppose a retail mall with stores and an integrated warehouse has a demand of around 600 kW. It can qualify by meeting the 500 kW threshold. They compare proposals from multiple suppliers: one offers time-of-use pricing, which aligns with their typical business hours (busiest store hours) and identifies off-peak usage.
They switch to RCOA, reduce their generation cost, and re-allocate savings into refurbishments or marketing. Also, the flexibility allows them to include different energy plans in the contract.
Even if a smaller business (for example, one with a 300 kW demand) isn’t yet eligible on its own, it can partner with other businesses within the same distribution utility area to qualify together under the Retail Aggregation Program.
By banding together, these businesses can switch to RCOA early. Once the threshold lowers further (as planned to 100 kW), they’ll qualify individually and can unband if they choose. Preparing early, gathering load data, and understanding supply options positions them for a first-mover advantage.
In all these cases, the benefit is not just a lower power bill; it's turning electricity from unpredictable overhead into a strategic lever your business can optimize.
The long-term vision for RCOA is a fully competitive retail electricity market where even smaller enterprises can freely choose their suppliers.
As the threshold continues to decrease, more businesses, from medium-sized manufacturers to service-oriented SMEs, will be able to participate. This expansion is expected to further drive down prices, improve service quality, and increase the share of renewable energy in the country’s power mix.
RCOA also plays a key role in promoting energy independence and sustainability by encouraging suppliers to diversify sources, invest in renewable energy, and innovate in energy management solutions.
If your business is exploring the benefits of RCOA for companies in the Philippines, you might still have a few questions about how it works, who can join, and what it means for your energy costs.
Here are some of the most common questions businesses ask about Retail Competition and Open Access (RCOA) and how it can help them make smarter power choices.
RCOA, or Retail Competition and Open Access, is a framework that allows qualified electricity consumers in the Philippines to choose their own Retail Electricity Supplier (RES). This system encourages competition among power providers and gives businesses more control over their electricity costs and service options.
Right now, businesses with a monthly average peak demand of at least 500 kW qualify as contestable customers under RCOA. But the Department of Energy (DOE) is working to expand eligibility to smaller consumers so more businesses can benefit from open access.
If your business doesn’t meet the 500 kW threshold yet, you can still join via the Retail Aggregation Program, which lets multiple businesses in the same distribution utility area combine their demand to qualify together and switch to RCOA early.
RCOA provides flexibility, cost efficiency, and energy transparency. Companies can negotiate better rates, customize contract terms, and access energy sources that fit their operational goals.
During the assessment of different Retail Electricity Suppliers (RES), businesses can compare different offers and contract types to choose one that best matches their energy consumption profile. This often leads to lower electricity costs compared to traditional utility rates.
A Distribution Utility (DU) owns and operates the power lines delivering electricity to consumers, while a Retail Electricity Supplier (RES) sells and manages electricity supply contracts directly with customers under the RCOA framework.
No. Participation in RCOA is voluntary and currently limited to qualified contestable customers. However, as thresholds decrease, more businesses will have the opportunity to opt in and experience its benefits.
Businesses must first confirm their eligibility, then evaluate accredited Retail Electricity Suppliers (RES), such as COREnergy, to compare rates and contract terms. Once a supplier is chosen, the switch is coordinated with the DOE and ERC for compliance and a smooth transition.
As one of the Philippines’ trusted energy partners, COREnergy helps companies reap the many benefits of RCOA by making energy simpler and switching smoother.
The company provides tailored electricity supply solutions that meet the unique needs of each client. Through transparent pricing, expert guidance, and flexible contract options, COREnergy enables businesses to:
With COREnergy’s support, customers can fully leverage the benefits of Retail Competition and Open Access in the Philippines and achieve greater business profitability, productivity, and performance.
The implementation of RCOA for companies in the Philippines marks a new era of empowerment for businesses. With the opening of the electricity market to competition, companies can now take an active role in choosing which supplier they source their power from, achieving greater savings, greater flexibility, and greater performance.
For forward-thinking businesses, RCOA isn’t just a legislative order; it’s a pathway toward smarter, more strategic energy management. With an experienced partner like COREnergy, navigating this open market becomes a seamless and rewarding process.
