Your electric bill is too high, here’s the real reason

You don’t need an economist to tell you that something is wrong. You see it every month, right there on your electric bill!

The number keeps going up, sometimes without enough warning, often without clear explanation. You adjust where you can: fewer appliances, shorter aircon use, lights off whenever possible. And yet the bill barely moves. It feels like no matter what you do, you’re still paying too much. Because the truth is – you probably are.

For decades, we have been told that high electricity prices are simply the cost of reality. We are an archipelago. We import fuel. Global oil prices fluctuate. All of these are true. But they are also convenient explanations. Justifications. One that stop short of asking harder, more uncomfortable questions.

If geography and global prices were the only reasons, then why does the Philippines consistently rank among the highest in electricity costs in Southeast Asia? Why are prices lower in Indonesia, also an archipelago? Or Vietnam and Thailand?

The answer lies not just in supply – but in the system behind it. Electricity pricing in the country is layered, complex and often difficult to unravel or unpack. Charges are broken down into generation, transmission, distribution, system loss and other adjustments that change monthly. Overseeing this is the Energy Regulatory Commission, while distribution is handled by major utilities companies across the country.

On paper, this structure is meant to protect consumers. In reality, it often leaves them in the dark. Most people don’t know why their bills increased. They just know that it did. Rate adjustments are announced, but rarely explained in a way that ensures completeness and clarity. Technical terms fill billing statements, but transparency remains elusive. The result is a system where people are expected to pay without fully understanding what they are really paying for.

And when real understanding is low, accountability tends to be thrown out. Because beyond global factors, there are inefficiencies within the system that quietly push costs higher. Delays in regulatory decisions can lead to temporary charges that linger longer than they should. Long-term supply contracts – while meant to ensure stability – can lock consumers into prices that are no longer competitive. System losses, whether due to technical limitations or other factors, are still partially passed on to the public.

Individually, these may seem like technical details that can be ignored. But together, they add up – to higher bills, month after month. And the burden is not shared equally.

For large corporations, electricity is just one line item in their balance sheet. For ordinary Filipinos, it is a daily concern. It affects how often the air conditioner can run, whether a small business can stay open longer or how much a family’s income is left after basic expenses. In many homes, managing the electric bill has become a constant exercise in compromise. This is why high electricity costs are more than just an inconvenience. They are a drag in our economic growth. A driver of inequality.

When power is expensive, business hesitates to expand. Investors look elsewhere. Jobs that could have been created never materialize. At the household level, every peso spent on electricity is a peso not spent on food, education or savings for emergencies.

So, what can be done? First, transparency must improve. Consumers deserve clear, straightforward explanations for every major rate change. Complexity should not be a shield against scrutiny.

Second, regulatory oversight must be stronger and faster. The ERC plays a critical role, but it must act with both urgency and independence. Delays and ambiguity only create space for inefficiencies. I’m sure that the new ERC chief, Atty. Francis Juan, a seasoned energy expert, will deliver significant improvements. He is known to be a high caliber executive who knows how to accomplish a difficult mission of untangling problems that he simply inherited.

Third, competition in power generation should be deepened. A more competitive market can help bring down costs – but only if it is backed by fair and consistent rules. Perhaps it’s time to revisit the EPIRA Law and drill down on how truly can we establish dynamic competition amongst power generation companies. If the EPIRA Law’s aspirations are already achieved, why are costs still high? Over coffee, we can discuss this at length.

Finally, accountability must be felt across the entire system – from power producers to distributors to regulators. Because ultimately, electricity is not a luxury. And the public deserves a system that treats it that way.

You can do everything right – use less power, conserve, adjust your lifestyle – and still end up paying more than you should. That’s not a consumer problem, that’s a system problem.

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Email: arielnepo.philstar.com