he Energy Regulatory Commission (ERC) has ordered the regional implementation of the Secondary Price Cap (SPC) in the Wholesale Electricity Spot Market (WESM), applying it retroactively to the August 2026 billing period to curb soaring power rates in Visayas and Mindanao.
The regulatory body acted motu proprio after internal data revealed persistent supply tightness in August 2026, during which Visayas and Mindanao registered 652 hours and 89 hours of combined Red and Yellow Alerts, respectively, a press statement posted by ERC on its facebook page Thursday evening DSept. 10, said.
Spot market prices surged to peaks of PhP18,590 per megawatt-hour (MWh) in Visayas and PhP19,560/MWh in Mindanao, it said.
Despite the severe local spikes, the existing system-wide SPC mechanism failed to trigger because lower power prices in Luzon diluted the nationwide rolling average used to set the price ceiling, it added .
Under the new directive, the SPC will be computed and applied on a per-region basis using each grid’s individual rolling average price, rather than the system-wide average, and without waiting for grid interconnection outages.
According to ERC simulations, regional application of the cap will reduce average August spot prices by 54% in Visayas (from PhP18,590/MWh down to PhP8,470/MWh) and by 56% in Mindanao (from PhP19,560/MWh to PhP8,690/MWh), the press statement said.
“When our own data showed that the safety mechanism meant to catch these very price spikes was not catching them, because VisMin’s high prices were being masked by the low Luzon prices, we moved immediately and decisively,” ERC Chairperson and CEO Francis Saturnino C. Juan said.
The decision was issued pursuant to the ERC’s oversight powers under the Electric Power Industry Reform Act of 2001 (EPIRA) and in coordination with the Department of Energy under Executive Order No. 110, Series of 2026, which declared a state of national energy emergency amid VisMin supply constraints.
As part of the ruling, the ERC issued key directives to industry stakeholders:
- Independent Electricity Market Operator of the Philippines (IEMOP): Ordered to recalculate August 2026 settlements, issue revised Final Statement Bills on or before Sept. 20, 2026, move consumer payment due dates to Sept. 28, 2026, and submit weekly monitoring reports.
- Philippine Electricity Market Corporation (PEMC): Directed to assess WESM mechanisms within 30 days and conduct a 60-day investigation through its Market Surveillance Committee into generation companies in Visayas and Mindanao for possible economic withholding, cartelization, or anti-competitive behavior.
- National Grid Corporation of the Philippines (NGCP): Tasked with submitting recommendations within 30 days to optimize existing grid interconnections.
- Distribution Utilities: Instructed to promptly pass down the reduced, SPC-based generation charges to end-consumers.
“Recalculating the Secondary Price Cap on a regional basis, and making it retroactive to August, means Visayas and Mindanao consumers will see real relief in their bills — not just an acknowledgment of their various letters to us,” Juan added.
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