DOUBLE WHAMMY: Brownouts now, higher Visayas power bills in September

By Rjay Zuriaga Castor

ILOILO CITY – Consumers in the Visayas endured recurring rotational brownouts in August, and they could now face higher electricity bills after wholesale power prices in the region surged to their highest levels yet amid tight supply and power plant outages.

The Independent Electricity Market Operator of the Philippines (IEMOP) reported record-high Wholesale Electricity Spot Market (WESM) prices in the Visayas and Mindanao in August, with average prices in both regions nearing the PHP 20 per kilowatt-hour (kWh) threshold.

WESM is the country’s centralized electricity market, where power is traded as a commodity and prices are determined by supply and demand in real time.

The market has operated in Luzon since 2006 and in the Visayas since 2010, with IEMOP taking over as market operator in 2018.

IEMOP’s Energy Average Supply, Demand, and Price Data for the August 2026 billing period, covering July 26 to Aug. 25, showed the Visayas recorded an average electricity price of PHP 18.59 per kWh, up PHP 7.30 from PHP 11.29 in the previous comparable period, or a 64.7% increase.

Mindanao recorded the highest average price among the three major grids at PHP 19.56 per kWh, a jump of PHP 9.17 from the previous period’s PHP 10.39, or 88.3%.

Luzon recorded an average of PHP 4.80 per kWh, down PHP 2.50, or 34.2%, from PHP 7.30 in the previous period.

Isidro Cacho Jr., IEMOP vice president for trading operations, said consumers served by distribution utilities and electric cooperatives with greater exposure to WESM purchases should expect higher electricity bills.

“In the Visayas and Mindanao, definitely, the high price in our electricity spot market would impact those who bought a lot from the spot market. If they have, for example, some utilities that have a 30 percent spot exposure, what they bought will definitely be priced at that level, which is high, so it will be reflected in their generation cost,” Cacho said in a press briefing on Wednesday, Sept. 9.

“There will definitely be an increase because the prices were really very high, as the price setters were the more expensive plants,” he added.

The August WESM price surge may be reflected in electricity bills issued in September, depending on each power utility’s billing cycle.

The increase in WESM prices, however, does not translate directly into an equivalent percentage increase in consumers’ total bills.

Not all distribution utilities (DUs) source their electricity from the spot market. Many rely primarily on long-term supply contracts and turn to WESM only when they need additional power or when contracted supply falls short.

Utilities with greater spot-market exposure are therefore more directly affected when WESM prices rise, while those with a larger share of contracted supply may see a smaller impact because only part of their requirements are bought at spot prices.

The higher WESM costs surface in the generation charge component of consumers’ electricity bills. The generation charge is a pass-through item, meaning DUs remit it to power suppliers without margin, and it is subject to review by the Energy Regulatory Commission.

Asked whether spot market prices could remain high until September, Cacho said this was “most likely” as long as the Visayas grid remained unstable and yellow and red alerts continued to be issued.

“As long as we have not returned to the situation where the cheaper plants are setting the price. As long as we continue to receive advisories of yellow and red alerts, that means we have a very thin margin in our grid, particularly in the Visayas, and that will result in higher prices in our electricity market,” he explained.

Cacho said the spikes in the Visayas and Mindanao were the highest in the spot market’s history in the two regions.

“I think what we’ve seen so far is the worst … Actually, I think this is the highest because, as far as I recall, since we started the market, these are the highest spot prices in the Visayas and Mindanao, particularly,” Cacho said.

What drove the price surge?

Cacho attributed the steep increase to the region’s low power supply, where demand outstripped what available generators could deliver.

Since August, the National Grid Corporation of the Philippines (NGCP) has issued alerts as available capacity fell short of projected peak demand, citing the continued unavailability of major coal plants and limited power imports from Mindanao.

As of Sept. 10, the NGCP said 10 power plants were on forced outage during September, while other plants have remained unavailable since previous months and years.

NGCP data showed four plants on forced outage since August 2026, one since July, two since June, and seven since May.

Three plants have been on forced outage since 2025, two since 2024, two since 2023, and one since 2021.

Sixteen power plants were also operating at derated capacities, bringing total unavailable capacity to 979.9 megawatts.

The NGCP identified the unavailability of Therma Visayas Inc. Units 1 and 2, and Panay Energy Development Corporation Unit 3 among the factors behind the red and yellow alert declarations on Thursday, Sept. 10.

The three units are among the largest baseload plants serving the Visayas grid. Panay Energy Development Corporation operates in Iloilo City, while Therma Visayas Inc. is based in Toledo City, Cebu.

The grid operator also cited limited power imports from the Mindanao grid as another factor behind the tight supply.

“Based on the data that we have, the margin in the Visayas is almost nil or just over zero, meaning the Visayas is really very dependent on imports from Luzon and Mindanao,” Cacho said.

He said the scarcity of supply within the region pushed more expensive power plants into the role of setting the market price.

Cacho added that high clearing prices from oil-based plants and battery storage facilities contributed significantly to the increase.

“These are the impacts on the August billing month, which are still continuing because we have seen that every day, even on Sundays, we have alerts,” he said.

Cacho said market separation also occurred because of transmission limitations, with the links between grids reaching their maximum capacity.

“We had market separation because of limitations. The links had already reached their maximum limits, such that we really had price separation. To mitigate this, we are actually already experiencing brownouts in the Visayas because there is really a shortage,” he said.

Market separation means electricity prices in the Visayas can diverge from those in other grids when transmission constraints cap the volume of cheaper electricity that can be imported into the region.