ILOILO City – Electricity consumers in the Visayas could get substantial relief from soaring power costs after regulators ordered the retroactive imposition of a regional price cap that could slash the average August wholesale electricity price by about 54 percent.
The Energy Regulatory Commission (ERC) ordered the Independent Electricity Market Operator of the Philippines (IEMOP) to recalculate August 2026 electricity market settlements after finding that the existing nationwide price-control mechanism failed to adequately capture extraordinary price spikes in the Visayas and Mindanao.
Under the ERC’s assessment, the regional Secondary Price Cap (SPC) could bring the average August Wholesale Electricity Spot Market (WESM) price in the Visayas down from P18,590 per megawatt-hour to P8,470/MWh — a reduction of about P10,120/MWh, or 54 percent.
Mindanao could see an even steeper reduction of about 56 percent, with its average WESM price falling from P19,560/MWh to P8,690/MWh.
The ERC issued the order on September 10 under ERC Case No. 2026-048 MC, making the regional price cap retroactive to the August 2026 supply month.
The commission said its monitoring showed that unusually high electricity prices in the Visayas and Mindanao were effectively being obscured by lower prices in Luzon under the existing system-wide price-cap mechanism.
ERC chairperson and chief executive officer Atty. Francis Saturnino C. Juan said the regulator acted after determining that the existing mechanism was failing to provide the protection it was designed to give consumers.
“This Order shows that the Commission does not simply watch prices climb and wait for the next billing cycle to ask questions,” Juan said.
Applying the SPC separately to each region would allow regulators to respond to actual market conditions within individual grids instead of relying on a nationwide average, he explained.
“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,” said Juan.
The ERC directed IEMOP to adjust the settlement calculations and issue the Final Statement Bill for the August billing period on or before September 20.
Distribution utilities in Luzon, Visayas and Mindanao were instructed to wait for the final WESM charges contained in IEMOP’s recalculated statement before incorporating them into their September customer bills.
Utilities whose regular meter-reading schedules come before the issuance of the final statement, however, should proceed with their meter readings and bill customers after IEMOP releases the recalculated charges.
The ERC said the arrangement would prevent unnecessarily extending billing periods, which could result in higher recorded electricity consumption and consequently larger bills.
Juan stressed that making the price cap retroactive is intended to translate the regulatory intervention into actual savings for consumers.
“Recalculating the Secondary Price Cap on a regional basis, and making it retroactive to August, means Visayas and Mindanao consumers will see real relief in their bills — not just an acknowledgment of their various letters to us,” he said.
Beyond lowering prices, the ERC ordered a deeper examination of what caused the unusually high WESM prices in the Visayas and Mindanao — including whether they resulted from legitimate electricity supply shortages or possible abuses in the power market.
“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. But if they reflect anything else, the Commission will act on it,” stressed Juan.
The ERC also urged generation companies, the Power Sector Assets and Liabilities Management Corp., National Grid Corp. of the Philippines and independent power suppliers to facilitate prompt payments by distribution utilities for the August supply month despite delays arising from the recalculation.
The regional Secondary Price Cap will remain in force until lifted by the ERC./PN
