AMI rising electricity rates across parts of the Davao Region, a consumer advocacy group is urging the Department of Energy (DOE) and the Mindanao Development Authority (MinDA) to strengthen efforts to attract more power generation investments in Mindanao, saying a larger and more diversified supply base is key to protecting consumers from volatile prices in the Wholesale Electricity Spot Market (WESM).
The appeal comes after several electric utilities and distribution firms in the region announced increases in electricity rates in recent months, largely attributed to higher generation costs and elevated prices in the WESM, where electricity is bought and sold in real time to address supply requirements.
In a statement issued on July 6, the Davao Consumer Movement said the latest power rate adjustments underscore the need to strengthen Mindanao's generation capacity to reduce the region's exposure to fluctuations in the spot market.
“The latest adjustments in electricity rates highlight a broader challenge facing the region's power sector. As supply tightens, many power distributors have become more exposed to fluctuations in prices at the Wholesale Electricity Spot Market (WESM), resulting in higher generation charges that are ultimately passed on to consumers.”
The group said electricity distributors with greater dependence on WESM are generally more vulnerable to sudden increases in spot market prices, particularly during periods of constrained supply, high demand, or unexpected outages of generating plants.
Data released by various distribution utilities illustrate the varying levels of reliance on WESM in the Davao Region. Based on May 2026 figures, the Northern Davao Electric Cooperative (Nordeco) sourced 73.63 percent of its electricity requirements from the spot market. Davao Light and Power Co. reported that approximately 40 percent of its power supply came from WESM as of June 2026, while the Davao Oriental Electric Cooperative (Doreco) obtained 12.87 percent of its supply from the market in May. Meanwhile, the Davao del Sur Electric Cooperative (Dasureco) relied on WESM for only 0.53 percent of its electricity requirements during the same period.
According to the consumer group, these figures demonstrate how the composition of a utility's power supply portfolio can significantly affect the generation charge reflected in consumers' monthly electricity bills.
Generation charges account for the largest component of residential electricity bills and are directly influenced by the cost of purchasing power from suppliers. When utilities procure a substantial portion of their electricity from WESM, they become more susceptible to market price movements, especially during periods when supply reserves are thin.
Energy experts have long noted that WESM serves an important role in ensuring electricity remains available by allowing utilities to purchase additional power when needed. However, reliance on the spot market is generally intended to complement — not replace — long-term power supply agreements, which typically offer more stable and predictable pricing.
The Davao Consumer Movement emphasized that maintaining a balanced mix of contracted power and strategic participation in WESM can help cushion consumers from abrupt increases in electricity prices while ensuring sufficient power supply during peak demand.
"The data also underscores the value of maintaining a balanced power supply portfolio. Long-term bilateral power supply agreements, complemented by prudent participation in WESM, can help cushion consumers from sudden spikes in spot market prices while ensuring sufficient electricity supply," the group said.
The organization also called on the DOE and MinDA to continue promoting an investment climate that encourages the construction of new power generation facilities, including conventional and renewable energy projects, to meet Mindanao's steadily growing electricity demand.
The DOE has repeatedly projected sustained growth in electricity consumption in Mindanao as economic activity, industrial expansion, and urban development continue across the island. In recent years, the national government has also pushed for additional investments in renewable energy, battery energy storage systems, and new generating facilities to improve grid reliability and maintain adequate reserve margins.
For its part, MinDA has consistently identified energy security as a critical component of Mindanao's long-term economic development strategy, stressing that reliable and competitively priced electricity is essential to attracting investments and supporting industries throughout the island.
The Davao Consumer Movement said expanding Mindanao's generation capacity and diversifying available power sources would lessen excessive dependence on WESM over the long term, helping stabilize electricity prices for households and businesses alike.
"Mindanao's growing economy requires a power sector that is both reliable and affordable. Encouraging new investments in power generation today is a long-term consumer protection measure that can help provide more stable electricity prices for households and businesses in the years ahead," the group said. DEF
