FOLLOWING mounting concerns over rising electricity costs in Mindanao, the Mindanao Development Authority (MinDA) warned that high power rates continue to threaten household finances, business competitiveness, and the region's long-term economic growth, stressing that energy affordability must go hand in hand with supply security.
In a statement issued August 5, MinDA Secretary Leo Tereso Magno welcomed the Davao City Council's call for stronger collaboration among government agencies, regulators, electric utilities, and the power industry to address increasing electricity prices.
"The challenge before us is bigger than any single institution. It requires a whole-of-government and whole-of-industry approach anchored on sound policy, responsible investment, and evidence-based decision-making," Magno said.
MinDA said that despite Mindanao maintaining a surplus in power supply, electricity rates remain vulnerable to several market-driven factors, including fluctuations in the Wholesale Electricity Spot Market (WESM), fuel costs, the generation mix, transmission limitations, and both scheduled and forced outages of power plants.
According to the agency, these factors continue to influence generation charges passed on to consumers, underscoring the need for long-term reforms beyond simply adding more generating capacity.
As chair of the Mindanao Power Monitoring Committee under Executive Order No. 81, MinDA recently convened an inter-agency meeting with the Department of Energy (DOE), Energy Regulatory Commission (ERC), National Electrification Administration (NEA), National Grid Corporation of the Philippines (NGCP), National Power Corporation (Napocor), Transmission Corporation (TransCo), Power Sector Assets and Liabilities Management Corporation (PSalm), and the Association of Mindanao Rural Electric Cooperatives (Amreco) to discuss measures that could help ease electricity costs.
Among the recommendations raised by MinDA was encouraging distribution utilities to pursue additional long-term power supply agreements where commercially viable, legally compliant, and beneficial to consumers. The agency also reiterated the need to accelerate renewable energy projects, battery energy storage systems, and the rehabilitation of the Agus-Pulangi Hydropower Complex to improve price stability.
The statement came as Davao Light and Power Company (DLPC) confirmed it is negotiating an emergency power supply agreement (Epsa) with Therma South Inc. (TSI) to reduce its dependence on the volatile spot market.
DLPC President and Chief Operating Officer Henriczar Tia said the proposed agreement would allow the utility to contract approximately 20 megawatts (MW) of TSI's excess generating capacity.
"Because of the City Council's push to contract more, we're now talking with TSI to enter into an emergency power supply agreement," Tia said during the Davao City Council's regular session.
He said the agreement, subject to approval by the ERC and DOE, could be implemented within one to two months.
"That will also help us reduce our exposure to the wholesale electricity spot market," Tia added.
The move follows sharp increases in WESM prices, which exceeded ₱10 per kilowatt-hour after several generating plants experienced unplanned outages, including shutdowns caused by the strong earthquake that struck the Sarangani area earlier this year.
The proposal also aligns with a resolution authored by Councilor Louie John Bonguyan urging Davao Light to secure more long-term bilateral power supply agreements while pursuing an interim Epsa with TSI and other baseload generators to cushion consumers from volatile market prices.
Tia also disclosed that PSalm has agreed to provide Davao Light an additional 25 MW allocation —16 MW firm capacity and nine MW non-firm capacity—which could further help lower electricity rates. Davao Light currently sources about half of its electricity requirements from the Agus-Pulangi Hydropower Complex operated by PSalm. DEF
