Many contestable retail power customers yet to switch providers, PCC study finds

THE Philippine Competition Commission (PCC) said many retail power users whose accounts can be contested by multiple providers have yet to switch in the absence of information about the process of changing suppliers.

In a policy dialogue with the Philippine Electricity Market Corp. (PEMC) last month, the PCC noted that a significant portion of contestable retail power customers have yet to experience the benefits of genuine supplier choice.

It also noted a trend of “affiliate switching,” wherein a contestable customer moves to a different retail electricity supplier (RES) but remains a customer of the same group.

A PCC industry study on barriers to switching providers also found the retail electricity market to be dominated by units of major power groups, raising questions about competition in the industry.

It said retail electricity suppliers affiliated with major power generators hold structural advantages over smaller, independent competitors.

“The study revealed high market concentration in the retail electricity sector, noting that vertical integration has resulted in a market dominated by a few conglomerates,” it said.

Both the PCC and PEMC said such market conditions require closer monitoring to fully assess its long-term impact on competition, the anti-trust regulator said.

The PCC noted that while heavy affiliate concentration could limit the diversification of the retail market, PEMC’s monitoring data showed that such movements are frequently driven by legitimate commercial factors, including contract flexibility, pricing structures, and established service quality.

The PEMC noted that the PCC’s findings align with the trends seen in its own Market Surveillance Committee.

Both parties noted that transition delays typically stem from systemic infrastructure limitations, particularly the procurement and installation of retail metering systems within franchise areas.

It also said that navigating complex contract provisions remains a challenge because contestable customers lack dedicated, internal technical teams to evaluate commercial offers.

The PEMC’s 2025 annual report indicated a distinct increase in electricity consumption volume within the competitive retail electricity market, driven by state-led choice programs over the past year.

The PEMC also anticipates a sharp increase in registrations among smaller commercial and industrial players after the Energy Regulatory Commission lowered the contestability threshold to 100 kilowatts (kW) from 500 kW starting June.

“Both the PCC and PEMC expect the expansion of the retail aggregation program to serve as a vital mechanism for smaller end-users to collectively participate,” the competition watchdog said.

The PCC and PEMC are negotiating a cooperation agreement that outlines specific mechanisms for data sharing regarding market settlement processes and pricing behaviors, the agency said.

The agreement will also cover protocols for PEMC to alert the PCC of observed market patterns or anomalous behaviors that may warrant competition review and joint policy advocacy.

The PCC conducts market studies to assess competition dynamics within key industries to push for better enforcement and policy reforms. — Beatriz Marie D. Cruz