ERC to Revise Time-of-Use Power Rates

The Energy Regulatory Commission (ERC) is set to revise the decades-old Time-of-Use (TOU) electricity pricing scheme in a move to make energy consumption more efficient and responsive to supply conditions.

ERC Chairperson Monalisa Dimalanta announced the update during the Energy Efficiency Day 2025 forum held in Pasay City, describing the current TOU framework as outdated and insufficient for managing today’s dynamic energy landscape.

“The least we can do is update the rates,” Dimalanta said.

“I think it’s just been updated once. So we need to update the rates. Even the National Power Corporation (NPC), it’s really hard for them to survive with those rates,” she added.

The TOU pricing mechanism was introduced nearly 20 years ago to encourage electricity users to shift consumption from peak hours—when demand and prices are higher—to off-peak periods, helping to reduce pressure on the grid.

However, Dimalanta said the scheme no longer reflects the actual cost of electricity generation, distribution, and demand patterns.

She urged that the revisions must extend beyond simple rate adjustments.

“Let’s not just update the rates, but maybe we can change the framework so that we can really push for more demand-side management solutions,” she said.

This, she added, would incentivize behavioral shifts in electricity use by making energy-saving habits economically beneficial.

The ERC is initiating consultations with stakeholders—including members of the Philippine Energy Efficiency Alliance (PE2)—to ensure the revised TOU scheme aligns with market needs, technological developments, and climate goals.

By making TOU pricing more adaptive, the regulator hopes to encourage smarter consumption habits, support grid stability, and lower power bills through informed energy use.

Beyond pricing reforms, Dimalanta addressed concerns about possible power supply issues during the dry season, when electricity demand typically spikes.

She assured that the Department of Energy (DOE) is actively coordinating with generation companies to optimize plant maintenance schedules and prevent supply disruptions.

The ERC is also accelerating the approval of pending power supply agreements to help shield consumers from price volatility in the Wholesale Electricity Spot Market (WESM).

In a bid to promote greater competition, Dimalanta confirmed that the ERC will lower the threshold for Retail Competition and Open Access (RCOA) from 500 kilowatts to 100 kilowatts.

This change will allow more businesses and institutions to choose their own electricity suppliers.

A formal roadmap for this transition is expected within the first half of 2025.

Dimalanta also highlighted the growing interest in the Retail Aggregation Program (RAP), which enables smaller electricity consumers to pool demand and negotiate for better electricity rates.

She said the response has been encouraging, signaling that Filipino consumers are ready for more competitive and flexible energy options.

The planned TOU reforms, along with enhancements to RCOA and RAP, are part of the government’s broader strategy to modernize the energy sector, improve energy security, and achieve the country’s clean energy transition goals.

As the Philippines continues to experience rising electricity demand—especially from data centers, industrial operations, and the growing digital economy—Dimalanta stressed the need for a more agile and equitable power pricing system.

“Our regulatory tools must evolve with the times,” she said.