ERC orders price cap on Visayas and Mindanao spot power rates

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September 12, 2026 | 12:00am

MANILA, Philippines — Electricity spot rates in the Visayas and Mindanao could settle below P9 per kilowatt-hour from nearly P20 per kWh after regulators acted on what they described as “extraordinarily high” prices.

In a 12-page decision dated Sept. 10, the Energy Regulatory Commission (ERC) ordered the regional implementation of the secondary price cap (SPC) in the Wholesale Electricity Spot Market (WESM), retroactive to the August billing period.

The move came after the ERC found that the existing system-wide SPC mechanism was failing to protect consumers in the Visayas and Mindanao, where tight supply conditions sent spot prices soaring in August.

The Visayas grid recorded 652 hours of red and yellow alerts in August, while the Mindanao grid logged 89 hours, ERC data showed.

The Independent Electricity Market Operator of the Philippines (IEMOP) earlier reported that the WESM price in the Visayas jumped by 64.9 percent to P18.59 per kWh in August from P11.29 per kWh in the previous month.

Mindanao saw an even steeper increase, with its average spot rate surging by 88.2 percent to P19.56 per kWh from P10.39 per kWh.

The Luzon spot price, however, dropped by 34.2 percent to P4.80 per kWh from P7.30 per kWh.

Although the SPC was designed to prevent sustained price spikes, it was rarely triggered because lower rates in Luzon pulled down the national average.

Under existing rules, the SPC is triggered only when the rolling average price across Luzon, Visayas and Mindanao breaches a prescribed threshold.

The ERC’s review, however, found that the system-wide computation “significantly understated” the frequency and severity of price spikes in the Visayas and Mindanao.

To address this gap, IEMOP has been directed to implement the SPC separately for each region, starting with the August supply period. The impact will be reflected in consumers’ power bills this month.

ERC simulations showed that the regional SPC implementation could have brought the average WESM rate in the Visayas down by 54 percent to P8.47 per kWh from P18.59 per kWh.

In Mindanao, the average spot rate could have fallen by 56 percent to P8.69 per kWh from P19.56 per kWh.

“This order shows that the commission does not simply watch prices climb and wait for the next billing cycle to ask questions,” ERC chairman and CEO Francis Saturnino Juan said.

“When our own data showed that the safety mechanism meant to catch these very price spikes was not catching them because VisMin’s high prices were being masked by the low Luzon prices, we moved immediately and decisively,” he said.

The ERC issued the latest order pursuant to its oversight authority over WESM and its mandate under the Electric Power Industry Reform Act to protect consumers and promote market competition.

Juan emphasized that protecting consumers does not mean abandoning the market.

“It means making sure the market is actually working as intended. If the price signals we saw in August reflect genuine scarcity, the market should be allowed to work, and generators should be able to recover their costs,” he explained.

“But if they reflect anything else, the commission will act on it. That is what it means to uphold both consumer protection and fair competition at the same time,” Juan said.