Electricity prices in the Visayas could fall by nearly 54 percent under the regional application of the Secondary Price Cap (SPC), as the Department of Energy (DOE) moves to stabilize the grid following the return of several generating units.
Energy Secretary Sharon Garin said the Energy Regulatory Commission (ERC) has begun applying the SPC separately to the Visayas and Mindanao grids, a change that would allow price spikes in the two regions to trigger the cap without being diluted by lower prices in Luzon.
The new treatment took effect beginning with the August 2026 billing period and is expected to be reflected in consumers’ September bills.
Based on ERC simulations cited by Garin, the regional SPC could bring the average August Wholesale Electricity Spot Market (WESM) price in the Visayas down to P8.47 per kilowatt-hour (kWh) from P18.59 per kWh, a reduction of nearly 54 percent.
In Mindanao, the average WESM price could fall to P8.69 per kWh from P19.56 per kWh, or nearly 56 percent lower.
Garin said the previous SPC mechanism combined the prices of Luzon, the Visayas and Mindanao in determining whether the price cap would be triggered.
Because Luzon accounts for a much larger share of the market, high prices in the Visayas and Mindanao could be offset by lower prices in Luzon.
‘This is very important and a big change in the monthly bill of our countrymen, especially in the Visayas and Mindanao,’ Garin said.
She stressed, however, that the price cap is not a substitute for addressing the supply constraints that caused the price surge.
‘The price cap alone is not enough,’ Garin said, adding that the DOE is pursuing measures to improve generation reliability and address recurring and prolonged plant outages.
Supply recovery
THE department is simultaneously working to restore generating capacity and strengthen reserves in the Visayas grid.
Garin said at least 758 megawatt of capacity across the Visayas and Mindanao grids has been recovered as generating units return to service.
Among the units cited were an 82-MW unit that has been operational since September 4, Therma Visayas Inc. (TVI) Unit 2 in Toledo with a capacity of 169 MW, TVI Unit 1 with 169 MW, Therma South Inc. Unit 1 with 150 MW, and GN Power Kauswagan Unit 2 with 138 MW.
The recovery, however, has not been without setbacks. Garin said TVI Unit 1 suffered a forced outage shortly after returning to service.
DOE field offices were deployed to inspect and audit the facility and work with the operator to restore the unit to stable and sustained operation.
The 150-MW Panay Energy Development Corp. Unit 3 in Iloilo also remains under restoration.
Despite the setbacks, Garin said the return of generating units has allowed the power reserve in the Visayas grid to gradually increase.
The DOE is also coordinating with the National Grid Corp. of the Philippines (NGCP) to accelerate the integration of 253 MW of battery energy-storage capacity in Cebu, Panay, Leyte and Negros.
Garin said the government is pursuing several measures while waiting for longer-term generation projects to come online, including battery storage, the restoration of existing plants and interim solutions such as power barges.
New generation capacity will take time to develop, she said.
Coal-fired power plants can take about three to five years to construct, while gas-fired plants may require about five years.
Solar projects can be developed faster but are not sufficient on their own to meet the energy requirements of the Visayas and Mindanao.
‘We’re catching up,’ Garin said, adding that the DOE is pushing investors to accelerate projects that normally require several years to complete.
She stressed that stabilizing the power situation requires cooperation among generating companies, electric cooperatives, distribution utilities, TransCo, NGCP, Napocor and local governments.
Meanwhile, the DOE is also examining the sharp movement in electricity prices.
Garin said she instructed the DOE Legal Services Bureau to formally communicate with the Philippine Competition Commission and Philippine Electricity Market Corp. to determine whether there was possible market abuse during the period of tight supply.
The DOE is also coordinating with the ERC and other power-sector agencies to monitor market conduct, stabilize supply and ensure that the recalculated charges are correctly reflected in consumers’ electricity bills.