Power Sector Assets and Liabilities Management Corp

THE DAVAO Consumer Movement (DCM) is urging regulatory agencies, particularly the Energy Regulatory Commission (ERC), to review pass-on charges to consumers, following recent announcements of rate increases that could significantly impact electricity bills.

Within a span of one month, DCM flagged three developments in the energy sector that may drive up costs for households and businesses:

• The surge in Wholesale Electricity Spot Market (WESM) rates in October
• The reinstatement of environmental charges by the ERC
• Higher transmission rates announced for November

In October, the Independent Electricity Market Operator of the Philippines (IEMOP) reported a 49.4% spike in average WESM prices, reaching P4.54 per kilowatt-hour (kWh). Spot prices in Mindanao rose even more sharply – up 40% to P5.87 per kWh. These increases affect the generation charge reflected in consumers’ monthly bills. Major plant outages contributed to the price hike, compounded by an earthquake in the Visayas on September 30, 2025, which caused multiple tripping incidents across transmission lines and generation facilities. Between September 26 and October 25, the available power supply dropped by 4% to 19,889 megawatts (MW), while demand rose by 1.8%, peaking at 13,881 MW.

Adding to the pressure, the ERC resumed collecting the P0.0025/kWh Universal Charge–Environmental Charge (UC-EC) on November 7, five years after its suspension in May 2020. Distribution utilities and the National Grid Corporation of the Philippines (NGCP) will collect the fee and remit it to the Power Sector Assets and Liabilities Management Corp. (PSALM). ERC Chairman Francis Saturnino Juan said the reinstated UC-EC will fund the rehabilitation and management of watershed areas under the National Power Corporation (NPC).

The NGCP also announced a 7.91% increase in transmission rates, bringing the overall charge to P1.5105/kWh. This hike is mainly due to higher ancillary service (AS) charges, which rose 15.23% to P0.7542/kWh. The AS charges are fees paid to reserve standby power for grid stability. Transmission wheeling rates, which cover the cost of delivering electricity from generators to distribution systems, also increased by 0.57% to P0.5953/kWh.

On top of these adjustments, the ERC is considering expanding the Lifeline Subsidy Program to support more low-income households. To fund the expansion, it is proposing a Uniform National Lifeline Subsidy Rate of P0.01/kWh, to be charged to full-paying electricity customers. The collected amount would provide full discounts to qualified marginalized consumers. Public consultations on the proposal are still ongoing.

While each adjustment may seem minor on its own, their cumulative effect could mean a noticeable increase in monthly electricity bills. These charges are all passed on to consumers. For instance, Davao Light’s residential rate was P8.98/kWh in January 2025. By October, it had risen to P9.15/kWh, and as of November, it stands at P10.06/kWh. Though Davao Light still offers the lowest residential rate in the region, regular households are beginning to feel the strain.

DCM is calling on the Department of Energy and the ERC to reassess the components of electricity bills. As a starting point, we suggest reviewing the proposal to remove the 12% value-added tax (VAT) on electricity. We also urge power distributors in the Davao Region to improve supply management and prioritize cheaper energy sources.

With electricity consuming a significant portion of household budgets, DCM warns that without effective government intervention, both consumers and businesses will struggle to keep up with rising costs. #=============

For more details:

Ryan Amper
Convenor
Davao Consumer Movement
0905-5634083