WITH electricity rates climbing sharply in recent months, the Davao Consumer Movement (DCM) is pressing Davao Light and Power Company to strengthen its long-term power supply strategy, improve service reliability and lessen its dependence on the volatile Wholesale Electricity Spot Market (WESM).
In a position paper submitted on August 24 to Davao City Councilor Louie John Bonguyan, chairperson of the City Council Committee on Energy and Water, the consumer advocacy group said the recent increase in power rates should prompt closer scrutiny of how the distribution utility secures electricity for its growing customer base.
“We need to raise the alarm regarding the relentless surge in electricity rates currently burdening households, small businesses, and key economic sectors across Davao City, its surrounding municipalities,” DCM convenor Ryan Amper said.
Davao Light's residential rate rose from ₱9.71 per kilowatt-hour (kWh) in December 2025 to ₱13.09 per kWh for the July 11 to August 10, 2026 billing period, marking a substantial increase in the cost of electricity for households within its franchise area.
The utility has attributed recent rate adjustments largely to higher generation charges, including the increased cost of electricity sourced from the WESM amid supply constraints and changes in the availability of generating plants.
For the DCM, however, the issue goes beyond the immediate movement of generation costs.
Amper said distribution utilities and electric cooperatives often cite WESM prices when explaining higher electricity bills, but consumers should also be given a clearer picture of how utilities forecast future demand, contract sufficient supply and limit their exposure to fluctuations in the spot market.
“A closer examination should also look at how utilities forecast demand, secure contracted power supply, and manage their exposure to volatile spot-market prices,” Amper said.
The WESM is designed to facilitate the buying and selling of electricity outside bilateral power supply agreements. Prices in the spot market can change depending on supply and demand conditions, making distribution utilities more vulnerable to sudden increases when they need to purchase significant volumes of electricity from the market.
DCM warned that excessive reliance on WESM purchases could translate into unpredictable and substantial adjustments in consumer electricity bills, especially when contracted generation is insufficient to cover demand.
The group is now calling on Davao Light to move more aggressively toward securing long-term bilateral contracts through a Competitive Selection Process (CSP), which is the mechanism required for distribution utilities to competitively procure power supply under existing energy regulations.
“We demand that Davao Light immediately conduct a Competitive Selection Process to secure competitively priced, long-term power supply agreements with reliable generation plants. This would help reduce dependence on volatile spot-market purchases and provide greater price stability for consumers,” Amper said.
DCM also urged the Davao City Council to support its appeal for the Energy Regulatory Commission (ERC) to study the possibility of deferring or staggering the recovery of recent WESM-related increases instead of immediately passing the full adjustment on to consumers.
“Imposing sudden and substantial rate increases creates a serious financial shock for households and businesses. The ERC should examine mechanisms that can cushion consumers from abrupt adjustments while ensuring that legitimate generation costs are properly accounted for,” Amper said.
The consumer group further asked Davao Light to publicly disclose its capacity requirements and procurement plans as it takes on a larger service territory.
Davao Light's franchise has been expanded to include the Island Garden City of Samal, as well as areas in Davao del Norte and Davao de Oro. DCM said the expansion should not result in existing consumers absorbing additional costs or experiencing weaker service as the utility integrates new customers and areas into its network.
“Because we actively backed this expansion, DCM holds a heightened duty of care to the public. It is precisely this direct involvement that fuels our concern today. Instead of seeing the promised benefits of reliable and competitively priced electricity, consumers are facing sharp increases in power rates alongside growing concerns over service quality and reliability,” Amper said.
The group said Davao Light should clearly demonstrate how it plans to meet the additional electricity requirements of Samal, Davao del Norte and Davao de Oro while preserving the reliability and affordability of power for its existing franchise area.
“Existing long-term ratepayers must not suffer degraded service or be made to implicitly subsidize the integration of new coverage areas,” Amper said.
The concerns come as the Davao City Council has also called for measures to address rising electricity costs. The council earlier urged Davao Light to secure additional and more stable sources of power, including long-term bilateral agreements and interim supply arrangements, to help reduce exposure to costly spot-market purchases.
Davao Light has also taken steps in recent months to manage the impact of supply constraints and high generation costs. The utility obtained regulatory approval to stagger the recovery of a portion of higher generation charges, allowing some costs to be spread across several billing periods rather than collected at once.
It has likewise pursued additional power allocations and supply arrangements to strengthen its available capacity, including efforts to obtain more power from the Power Sector Assets and Liabilities Management Corp. These developments form part of the utility's broader effort to secure additional supply as demand grows across its expanding franchise area.
For DCM, however, immediate measures must be matched with a more transparent and durable strategy that gives consumers greater protection from abrupt electricity price movements. DEF
