Manila Water Joins Expanded Retail Aggregation Program, Advancing Philippine Power Market Reform

The Philippine power industry has taken a significant step toward full Retail Competition and Open Access (RCOA) as Manila Water successfully transitioned its first ten facilities, totaling 500 kilowatts (kW), from the captive to the contestable market under the expanded Retail Aggregation Program (RAP).

The expanded RAP, enabled under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), allows multiple end-users with consumption below the 500kW threshold to aggregate their loads within the same franchise area and under specified conditions. This aggregation allows them to contract with a preferred supplier at a negotiated purchase price.

Manila Water became the first customer to switch under the expanded RAP by consolidating the demand from ten facilities, primarily Sewage Treatment Plants (STPs) within the Manila Electric Company (MERALCO) franchise area, to meet the 500kW RCOA threshold.

Regulatory Support and Market Development

The Energy Regulatory Commission (ERC) bolstered the implementation of RAP through Resolution No. 13, Series of 2024, titled the “Omnibus Rules for Customer Choice Programs in the Retail Market.” This resolution permits demand aggregation for metered facilities that either belong to the same owner or operate within the same business category, provided they are located in the same franchise area.

Manila Water welcomed the ERC’s efforts in institutionalizing the RAP, emphasizing its impact on consumer choice and electricity cost reductions.

“Manila Water is proud to work alongside the government in expanding customer choice and lowering power rates through negotiated tariffs,” said Jocot de Dios, President and CEO of Manila Water. “By leading this breakthrough, we secure cost-efficient energy for our water and wastewater treatment plants while paving the way for a more sustainable and competitive energy market.”

Impact on the Power Sector

According to ERC data, retail electricity prices in 2024 averaged PhP5.77/kWh, with the lowest price recorded at PhP3.50/kWh.

With Manila Water’s pilot switch, industry experts anticipate that more consumer groups will transition to the contestable market under RAP in the coming weeks, further driving competition in the power sector.

“It is exciting to see more consumers gaining access to the benefits of exercising their power of choice,” said ERC Chairperson and CEO Monalisa C. Dimalanta. “This inspires us to work even harder in promoting consumer rights and ensuring a more dynamic retail electricity market.”

As more businesses explore retail aggregation, the ERC continues to refine policies that promote competitive electricity pricing and sustainable energy solutions across the Philippines.