DAVAO Light and Power Company (DLPC) is in talks with Therma South Inc. (TSI) for an emergency power supply agreement (EPSA) to address the impact of spikes in spot market prices.
Henriczar Tia, DLPC president and chief operating officer, confirmed during Tuesday’s regular session that the distribution utility is looking to contract TSI’s available excess capacity through an EPSA.
“Because of the City Council’s push to contract more, we’re now talking with TSI to enter into an emergency power supply agreement,” Tia said.
An EPSA is a short-term, negotiated power contract used by distribution utilities to address sudden electricity shortages, grid emergencies, or power gaps during peak demand periods.
Tia said TSI has an excess capacity of around 20 megawatts (MW) for this EPSA.
Tia said the agreement is expected to be implemented within one to two months, subject to regulatory approval from the Energy Regulatory Commission (ERC) and the Department of Energy (DOE).
“That will also help us reduce our exposure to the wholesale electricity spot market,” Tia added.
He said that the city government’s push to secure more contracted power would reinforce their application before regulators.
The move follows concerns over fluctuating generation charges driven by exposure to the Wholesale Electricity Spot Market (WESM).
Tia said spot market rates spiked above ₱10 per kilowatt-hour following unscheduled plant outages, including forced shutdowns triggered by a strong earthquake in the Sarangani region.
Councilor Louie John Bonguyan had proposed a resolution urging Davao Light to enter into long-term bilateral power supply agreements with power producers to secure stable and affordable electricity rates for the future.
“In the interim, DLPC is strongly urged to enter into an Emergency Power Supply Agreement (EPSA) with TSI, if feasible, as well as with other base-load power plants, to immediately cushion the consumers from the sudden surge in electricity charges caused by high WESM prices,” the resolution reads.
Bonguyan stressed that under ERC rules, Davao Light is required to maintain power supply contracts that ensure a stable supply at a reasonable cost for consumers.
“Available generating capacity from Therma South, Inc. (TSI) and other base-load power plants provide an opportunity for DLPC to secure dependable and competitively priced power,” he said in the resolution.
TSI is currently operating at full capacity, producing 300 MW gross and 270 MW net output, with 30 MW reserved for internal plant operations.
With this, approximately 92% or 249 MW of its net capacity is contracted to 22 distribution utilities and electric cooperatives across Mindanao through Competitive Selection Processes (CSP). The remaining 8% is supplied directly to WESM.
In addition to the proposed EPSA, Davao Light cited positive developments regarding its allocation from the state-owned Power Assets and Liabilities Management Corporation (PSALM).
Tia said PSALM is set to grant an additional 25 MW allocation consisting of 16 MW firm and 9 MW non-firm capacity.
“We note that PSALM is one of the cheapest sources of power here in Mindanao, so for us to enjoy an additional allocation will help reduce the rates. We thank the City Council for that resolution. I think it prompted PSALM to act quickly on our request,” Tia said.
It can be noted that Davao Light urged the PSALM Corporation to retain the 2025 supply allocation for the electric distribution utility. The utility company sources around 50% of its power supply from the Agus-Pulangi hydropower complex consisting of power plants owned by PSALM.
