AboitizPower Prepares for Wider RCOA Market

Why It Matters

The threshold cut expands consumer choice, potentially eroding the captive base that fuels AboitizPower’s distribution revenue, while also creating new retail growth avenues. Success in navigating this transition will shape the firm’s earnings and influence the competitive dynamics of the Philippines’ power sector.

Key Takeaways

• RCOA threshold drops to 100 kW, expanding eligible consumers.
• AboitizPower serves over 1 million distribution customers across two utilities.
• Retail market share at 27% makes Aboitiz the second‑largest retailer.
• Shift to retail could leave DUs with excess capacity and lower demand.
• Retail savings of ~P2.9 bn (~$53 m) recorded in first two months.

Pulse Analysis

The Philippine Energy Regulatory Commission’s decision to lower the RCOA eligibility threshold to 100 kilowatts marks a decisive policy shift aimed at liberalising the power market. By allowing smaller commercial and industrial users to source electricity directly, the move is expected to intensify competition among generators and retailers, driving price transparency and encouraging efficiency gains across the grid. For consumers, the change promises greater bargaining power, while regulators anticipate a more resilient supply landscape as reliance on a handful of distribution utilities diminishes.

Aboitiz Power Corp. stands at the centre of this transition. Its two distribution arms—Visayan Electric, serving 523,484 customers, and Davao Light, with 515,359—collectively power over a million end‑users, anchoring the company’s traditional revenue stream. However, the expanding retail pool threatens to siphon demand away from these utilities, potentially leaving them with excess generation capacity and under‑utilised infrastructure. To mitigate this risk, Aboitiz is investing in data analytics and customer‑centric solutions, aiming to retain high‑value clients by offering competitive retail tariffs and value‑added services that leverage its generation assets.

The broader market impact is already materialising. Philippine Electricity Market Corp. data reveal that retail‑sourced power delivered savings of roughly P2.9 billion—about $53 million—in just the first two months of 2026, underscoring the cost advantage of competitive procurement. As contestable customers rise, firms that can swiftly adapt their pricing models and integrate renewable sources will likely capture a larger share of the burgeoning market. For Aboitiz, the challenge will be to balance its legacy distribution business with aggressive retail expansion, a dual strategy that could set a benchmark for integrated energy providers across emerging economies.