The Energy Regulatory Commission (ERC) has enforced a secondary price cap across the Visayas and Mindanao power grids to curb escalating electricity rates driven by ongoing regional generation shortages and climbing demand.
The intervention targets severe price spikes in both regions, where market rates recently diverged dramatically from those in Luzon.
Speaking on Salaam Radio, ERC Director Sharon Montañer reported that the load-weighted average price of electricity spiked to P18.59 per kilowatt-hour in the Visayas and P19.65 per kilowatt-hour in Mindanao throughout August. By comparison, Luzon’s average rate remained far lower at P4.80 per kilowatt-hour during the same timeframe.
Montañer highlighted that persistent power deficits remain the main catalyst for the steep costs. Tight generation margins have been further strained as regional electricity consumption continues to climb, driving spot market values higher.
To counter the sharp rate increases, the ERC modified its approach by evaluating and triggering the secondary price cap on a regional basis rather than relying on a unified, system-wide average.
Montañer explained that if the secondary price cap were based on the entire power system, the relatively low electricity prices in Luzon could pull down the overall average and prevent the mechanism from being activated, even when prices in the Visayas and Mindanao were already extremely high.
Under the localized application, price surges in Visayas and Mindanao will be capped at approximately P7 to P8 per kilowatt-hour during peak stress periods.
The regulatory body noted that it will maintain close oversight of regional supply and market fluctuations while national energy authorities work toward expanding generation capacity in both island groups.