FOLLOWING a rapid succession of cost adjustments in the power sector, the Davao Consumer Movement (DCM) is urging the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to “reassess the components of electricity bills” amid rising pass-on charges that are expected to push electricity prices even higher across the region.
Cost drivers pile up across the power sector
The consumer group issued the call after identifying three major developments that unfolded within weeks: a spike in Wholesale Electricity Spot Market (Wesm) prices, the return of the Universal Charge–Environmental Charge (UC-EC), and newly approved increases in transmission fees. DCM warned that all three will directly impact customer bills.
The group stressed that “these charges are all passed on to consumers,” adding that even gradual increases are becoming too much for ordinary households to absorb. It noted that “regular households are beginning to feel the strain.”
Wesm prices surge on supply drop and grid disruptions
The Independent Electricity Market Operator of the Philippines (IEMOP) reported that average Wesm prices rose 49.4% in October to P4.54 per kilowatt-hour (kWh). Spot market prices in Mindanao climbed even higher — up 40% to P5.87 per kWh.
The surge was attributed to major power plant outages and transmission disturbances following the September 30 earthquake in the Visayas.
The tremor caused a series of tripping incidents across generating units and transmission lines, tightening supply at a time when demand was rising.
Between September 26 and October 25, the available power supply fell 4% to 19,889 megawatts while demand increased 1.8%, peaking at 13,881 MW.
DCM said the upward movement of the market price is already translating into higher generation charges. The group emphasized that “their cumulative effect could mean a noticeable increase in monthly electricity bills.”
Environmental charge reinstated after 5 years
Another upward adjustment came on November 7, when the ERC resumed the collection of the P0.0025/kWh Universal Charge–Environmental Charge (UC-EC), which had been suspended since May 2020.
The collection will be undertaken by distribution utilities and the National Grid Corporation of the Philippines (NGCP), with proceeds remitted to the Power Sector Assets and Liabilities Management Corp. (Psalm).
ERC Chairperson Francis Saturnino Juan explained that the reinstated UC-EC will fund the “rehabilitation and management of watershed areas under the National Power Corporation (NPC).”
Transmission rates increased due to higher ancillary services
NGCP also announced a 7.91% increase in transmission rates beginning November, bringing the overall transmission charge to P1.5105/kWh. This adjustment is largely due to a 15.23% increase in ancillary service (AS) charges, which cover standby power needed to stabilize the grid.
Transmission wheeling rates, the cost of delivering electricity from generators to distributors, also rose 0.57% to P0.5953/kWh.
DCM argued that these changes add pressure on both household and business consumers. To mitigate the burden, the group reiterated its call for policy reforms and emphasized: “We suggest reviewing the proposal to remove the 12% value-added tax (VAT) on electricity.”
It added that unless the government acts swiftly, “both consumers and businesses will struggle to keep up with rising costs.”
Davao Light confirms November rate hike
Davao Light and Power Co. (Davao Light) confirmed that its residential rate for November stands at P10.0612/kWh, an increase of P0.9080/kWh from October’s P9.1532/kWh. The new rate covers the billing period from November 11 to December 10.
The utility explained that rising Wesm prices and higher NGCP transmission charges are among the main drivers of the increase. Additional upward pressure came from the ERC-approved Feed-In Tariff Allowance (FIT-All), which rose from P0.1189/kWh to P0.2073/kWh, and from the reinstated UC-EC of P0.0025/kWh.
Davao Light clarified that the electricity bill consists of generation, transmission, distribution, and government or other charges. It stressed that generation, transmission, and government charges are pass-on items collected on behalf of other entities, while the company’s own distribution charge “has remained unchanged since it was approved by the ERC in 2013.”
The utility encouraged customers to adopt electricity-saving measures during the holiday season to avoid unexpectedly high bills. Davao Light, now in its 79th year of operations, is preparing to expand service coverage to the entire provinces of Davao del Norte and Davao de Oro. DEF