THE Institute for Climate and Sustainable Cities (ICSC), a nonprofit policy group, said the recent spike in electricity rates underscores the need for more indigenous and renewable power plants in the country.
ICSC energy transition advisor Alberto Dalusung III said the generation charge remains the largest component of consumers’ electricity bills, even as public attention has centered on other charges.
This points to the need for a more diversified power mix built on indigenous renewable energy, along with power procurement strategies that prioritize affordability, energy security, and resilience, Dalusung noted.
The Department of Energy (DOE) reported that the Philippines had the highest average residential electricity rate in Southeast Asia in June at P12.43 per kilowatt-hour (kWh), more than Singapore’s P12.34 per kWh.
The DOE attributed it to tighter supply, prolonged power plant outages, higher fuel costs, and greater reliance on costlier power sources to avoid interruptions.
ICSC data showed 48 on-grid distribution utilities posted residential rates above the national average in June, with many Filipino households paying more than P12.43 per kWh.
The increases stemmed from a mix of factors, including power supply agreements, exposure to the Wholesale Electricity Spot Market (WESM), and local operating conditions.
ICSC noted that recurring outages at coal plants, particularly in the Visayas, pushed WESM prices sharply higher and contributed to grid alerts and rising rates. Distribution utilities with heavy WESM exposure were hit hardest by the price spikes, it said.
In contrast, some utilities in Bohol and San Jose City, Nueva Ecija posted rates well below the national average in June, which ICSC attributed to their reliance on geothermal energy — an indigenous resource with relatively stable and predictable generation costs.
ICSC concluded that building more resilient power portfolios is essential over the long term, noting that reduced dependence on imported fuel would help shield consumers from price volatility, since fuel costs directly drive generation charges.