Nearly 50 power utilities charge higher rates – think tank

MANILA, Philippines — The Philippines already has Southeast Asia’s highest average residential electricity rate, yet consumers served by 48 on-grid power utilities are paying even more.

Manila-based think tank Institute for Climate and Sustainable Cities (ICSC) said households in many parts of the country faced power rates higher than the national average of P12.43 per kilowatt-hour (kWh) in June.

“While recent public discussions have focused on the various charges reflected in electricity bills, the generation charge consistently accounts for the largest share of what consumers pay,” ICSC energy transition advisor Alberto Dalusung III said.

The generation charge covers the cost of power procured by distribution utilities from bilateral supply contracts and the Wholesale Electricity Spot Market (WESM).

Last month, the average electricity rate in the Philippines surpassed Singapore’s by P0.093 per kWh, making it the highest in the region.

The Department of Energy attributed the increase to sustained electricity demand during the summer months and power plant outages, forcing utilities to rely on costlier fuel.

“This highlights the need for a more diversified power mix centered on indigenous renewable energy resources and improved power procurement strategies that prioritizes affordability, energy security and resilience,” Dalusung said.

ICSC data showed that the Southern Leyte Electric Cooperative, which recorded the country’s highest on-grid residential rate of P16.57 per kWh in June, sourced 24.57 percent of its supply from WESM.

Unlike fixed-rate supply contracts, WESM prices fluctuate with market conditions. Prices typically rise when electricity demand spikes or when power supply tightens.

These price spikes, the ICSC said, particularly affect power utilities with greater exposure to WESM purchases.

In contrast, the think tank noted that power utilities prioritizing the procurement of geothermal energy posted significantly lower residential rates last month.

Among them were the Bohol I Electric Cooperative, which charged P10.80 per kWh, and the San Jose City Electric Cooperative in Nueva Ecija, where households paid just P9.85 per kWh.

Currently, renewables account for only 25 percent of the country’s energy mix, with coal-fired generation still dominating at around 60 percent.

The Philippines relies heavily on Indonesia for coal supplies, where roughly 98 percent of imports come from.

“By reducing dependence on imported fuels, utilities can better protect consumers from electricity price volatility, as fuel costs are directly reflected in generation charges,” the ICSC said.