The Energy Regulatory Commission said price offers close to reserve price ceilings in the third round of the Green Energy Auction Program reflected market structure and limited competition, not anti-competitive conduct.

In a June 30, 2026, statement from Pasig City, the ERC rejected what it called “inaccurate and unfounded conclusions” in a June 23, 2026, Philippine Center for Investigative Journalism article titled “Tycoons Swoop in on the Clean Energy Boom, Raising Prices for Consumers.”

The PCIJ article raised concerns over the conduct of bidders and the potential impact of GEA-3 prices on electricity consumers.

The ERC said no factual or legal basis had been presented to impute anti-competitive behavior to developers that joined the auction for non-FIT-eligible renewable energy technologies.

The auction covered geothermal and pumped-storage hydropower projects, which are among the technologies the government is using to expand renewable energy capacity while maintaining grid reliability.

The commission said its role in GEA-3 was strictly limited to price evaluation under the Green Energy Auction framework established by the Department of Energy and the ERC’s Price Determination Methodology Rules, or Resolution No. 19, Series of 2024.

Under that framework, the ERC said it had two functions: establishing the methodology and parameters for evaluating the reasonableness of price offers, and endorsing to the DOE an evaluation report indicating which offers it found acceptable and at what rates.

The ERC said it does not select winning bidders, award contracts, or approve the auction terms of reference.

The commission said those functions belong exclusively to the DOE and the Green Energy Auction Committee.

The ERC said it evaluated all 14 price offers endorsed by the DOE.

The commission said it made significant adjustments to two offers that did not fully align with the parameters under the Price Determination Methodology Rules.

Former ERC Chairperson Monalisa Dimalanta transmitted the Evaluation Report to then-Energy Secretary Raphael Perpetuo Lotilla on April 15, 2025.

The ERC said any action taken by the DOE on that report, including how it exercised policy discretion in determining and announcing winning bidders, was the department’s prerogative and responsibility.

The commission said criticism of the GEA-3 outcome should not be directed at the ERC, especially under the leadership of Dimalanta’s successor, Chairperson Francis Saturnino C. Juan, because that would confuse the regulator’s advisory and pricing function with the DOE’s procurement decision.

The ERC described GEA-3 as a “thin market auction.”

The commission said only three geothermal plants qualified, with a combined capacity of 30.887 megawatts against a 100-MW target.

It said Pumped-Storage Hydropower Lot 1 also had only three bidders.

The ERC said the withdrawal of the 52-MW Maibarara Geothermal Plant further reduced competition in the geothermal segment.

“In this context, the economics of reverse auction theory are unambiguous: when the number of competing bidders is structurally limited, rational profit-maximizing behavior leads each bidder to anchor its offer near the reserve price ceiling rather than shade it aggressively downward,” the ERC said.

“This is not collusion. This is the predicted equilibrium outcome in thin markets,” it added.

The ERC said competition law requires evidence of explicit coordination or concerted action, not merely price offers submitted near a reserve price.

The regulator said its internal benchmark rates for GEA-3 were based on a discounted cash flow model.

The model considered project costs, operations and maintenance expenses, financing conditions, capacity factors, asset life, and tax incentives under the Renewable Energy Act.

The ERC said the benchmark rates served as cost-reflective ceilings, not target prices.

“They are not targets. They are ceilings grounded in cost reality,” the ERC said.

The commission also disputed the interpretation of a 99.86% figure cited in the PCIJ article.

The ERC said the 99.86% figure referred to the weighted average evaluation score of 14 price offers.

It said the score measured how bidders’ technical and financial assumptions complied with thresholds under the Price Determination Methodology Rules.

The commission said a high compliance score did not mean price offers were set at the government’s maximum price limits.

The ERC said it had flagged to the DOE that many developers used maximum parameter values from the methodology annexes instead of submitting project-specific cost data.

The commission said it corrected several offers that exceeded reasonable cost benchmarks.

For Tanawon Geothermal, the ERC recommended PHP 7.7726 per kilowatt-hour from the offered PHP 8.2258 per kWh.

For Mindanao 3 Binary, the ERC recommended PHP 5.1164 per kWh from PHP 9.9316 per kWh.

For Bago Binary, the ERC recommended PHP 8.1173 per kWh from PHP 12.1687 per kWh.

For the Wawa pumped-storage hydropower project, the ERC recommended PHP 5.3561 per kWh.

For the Pakil pumped-storage hydropower project, the ERC recommended PHP 5.4597 per kWh.

The ERC said the pumped-storage hydropower offers were adjusted after it found that the bids used a 20-year cost recovery assumption instead of the 40-year economic useful life prescribed under the methodology.

Based on DOE records cited by the ERC, all bidders accepted the recommended rates except First Gen/Lopez’s Mindanao 3 Binary plant.

The ERC said Mindanao 3 Binary declined the recommended rate and was later disqualified from the awards.

The commission acknowledged that GEA-3 raised structural concerns.

These include thin geothermal supply, the effects of marginal-offer rules applied per lot, and the absence of a pre-disclosed Green Energy Auction Reserve Price as a public reference ceiling.

The ERC said these concerns should be addressed through improved auction design in future rounds.

The commission said the concerns should not be used to attribute bad faith or anti-competitive conduct to developers without evidence.

The DOE released the GEA-3 notice of award on June 10, 2025, listing potential winning bidders, offered capacities, and ERC-recommended rates.

Government reports said the auction drew bids exceeding the installation capacity target, although the geothermal segment remained undersubscribed at 30.887 MW against a 100-MW target.

The Green Energy Auction Program is a government mechanism intended to accelerate renewable energy development by securing electricity supply through competitive bidding.

The program is also meant to support the Philippines’ renewable energy targets while giving developers price signals for capital-intensive technologies such as geothermal and pumped-storage hydropower.

The ERC said it remains ready to work with the DOE on reforms that would help future green energy auctions deliver renewable energy capacity at competitive prices for Filipino consumers.