The Philippine Competition Commission (PCC) and the Independent Electricity Market Operator of the Philippines (Iemop) held a strategic policy dialogue (SPD) to discuss the findings of PCC’s market study on competition and switching barriers in the Philippine retail electricity market.
Iemop is the operator of the Wholesale Electricity Spot Market (WESM). It is responsible for calculating real-time market prices and the dispatch schedule of participants in the WESM. Iemop maintains a registry of contestable customers, tracks market transactions, facilitates customer switching, and oversees the billing and settlement procedures in the WESM.
The Electric Power Industry Reform Act, or Republic Act No. 9136, provides the legal framework that enables eligible customers to choose and source their electricity requirements from different retail electricity suppliers (RES). The PCC-IEMOP dialogue focused on the law’s key provisions, which implement the retail competition and open access program in the electricity market.
The PCC examined competition in the retail electricity market and found that retail electricity suppliers (RES) affiliated with power generators hold inherent advantages, making it difficult for smaller players to compete.
The study found that generators often prioritize supply through bilateral contracts, the spot market, and retail supply agreements with their affiliated retailers, leaving independent suppliers with limited or residual supply.
The PCC said policymakers may need to revisit rules on vertical integration between generation and retail distribution to boost market competition.
The initial findings of the market study also highlighted the barriers that limit the ability of eligible customers to switch to RES. Customers have limited knowledge of the switching process (e.g., technical and documentary requirements, and negotiating retail supply contracts). They also face delays in the procurement and installation of retail metering systems.
The study also showed a high level of “affiliate switching,” where customers move between retail suppliers affiliated with the same parent company. The PCC noted that such practices may not signify true retail competition and recommended easing the entry of independent retailers to broaden consumer choice.
The Iemop expects to lower the minimum monthly consumption for contestable customers from 500 kilowatt-hours to 100 kilowatt-hours by June 2026.
The move aims to boost customer participation in the retail market and may increase competition. In anticipation of this transition, IEMOP is currently enhancing its central registration system to streamline and automate customer switching requirements, including the development of an electronic-based switching system to handle the projected increase in market participants.
The PCC and Iemop expressed interest in potential areas of collaboration, including the sharing of data and research outputs, and spreading awareness of customer choice programs available to eligible electricity consumers.
The PCC conducts market studies to examine the practice of competition in key markets and inform the Commission’s enforcement and policy reform initiatives. The SPDs help validate the initial findings of a market study and solicit comments from relevant agency partners before publication. PR