BUSINESSES are encouraged to explore retail electricity supply (RES) as the government’s open-access program expands, giving more companies the option to choose their power supplier and potentially cut electricity costs.
Marko Sarmiento, vice president and head of operations at Corenergy, the retail electricity supply arm of Cebu-based Vivant Group, said the continued lowering of the eligibility threshold under the Retail Competition and Open Access (RCOA) program is opening the market to smaller businesses.
The threshold for contestable customers was reduced to 100 kilowatts of peak demand in June from one megawatt when the program began in 2013. Sarmiento said this has allowed more commercial establishments and small and medium enterprises to participate.
The biggest potential savings are in the generation charge, which accounts for more than half of a typical electricity bill.
Sarmiento said customers shifting to an RES provider could reduce generation costs by about 10 percent to 15 percent, although actual savings would depend on the distribution utility, consumption profile and prevailing electricity rates.
Aside from potential savings, RES can help businesses make power expenses more predictable. Sarmiento said providers can offer fixed-rate contracts of at least one year, allowing customers to manage electricity budgets.
The shift also does not require major investments in power infrastructure. Existing electrical lines and other distribution assets remain under the distribution utility. The transition mainly involves documentation and coordination with the distribution utility and regulators, although an advanced meter may be installed.
Sarmiento said an initial transition generally takes about 90 days, while customers already under an RES arrangement may switch suppliers in about 30 days.
Major hurdle in RES adoption
Awareness, however, remains a major hurdle.
More than half of eligible contestable customers have yet to switch suppliers, Sarmiento said, as many businesses remain unfamiliar with the program or perceive the process as complicated.
Businesses also need to assess suppliers beyond headline rates, including contract terms and their ability to execute the transition.
One company taking advantage of RES is McDonald’s Philippines, which expects the shift to help manage operating costs as it expands while keeping menu prices affordable.
“We had to find ways to optimize our operations, and that’s precisely why Corenergy comes in,” McDonald’s Philippines managing director Margot Torres said at a briefing on Aug. 27, 2026.
Utilities account for about six percent to seven percent of the company’s sales, with electricity making up about 72 percent of its utility expenses, Torres said.
McDonald’s has shifted 17 stores to Corenergy, with 19 more stores in Negros expected to follow. The partnership will eventually cover 59 stores across Cebu, Negros, Northern Mindanao and Davao.
In Cebu, the company expects savings of about P52,000 per store per month, equivalent to an estimated 10 percent to 14 percent reduction in electricity costs, Torres said.
The savings will help the company manage rising labor and other operating expenses without passing the full impact on to consumers.
“For us, it’s not just a cost savings exercise. It’s cost optimization,” Torres said.
The partnership also supports McDonald’s expansion plans. The company has 38 stores in Cebu and plans to open five more before year-end. It has about 100 stores across the Visayas and around 75 in Mindanao. Nationwide, McDonald’s Philippines has 862 stores.
Torres said the company plans to continue expanding in the Visayas and Mindanao, making energy-cost management increasingly important as its store network grows.
“We are not just a big market; we’re also a high-growth market,” she said, noting that the Philippines is among McDonald’s top markets globally in terms of store growth.
Power interruptions
Sarmiento stressed that switching to an RES provider does not eliminate power interruptions. While an RES provider may source electricity from different generation sources across the country, the distribution utility remains responsible for the local network.
“Still, the growing RES market gives businesses greater control over the generation component of their electricity costs,” Sarmiento said.
Corenergy is targeting about 300 accounts by year-end, up from around 50 at the end of 2025, as more customers become eligible under the lower threshold.
There are more than 50 RES providers in the country, giving eligible businesses options to compare suppliers and negotiate power contracts. / KOC