March electricity prices jump as supply tightens

Electricity prices in the Wholesale Electricity Spot Market rose in March as tighter supply and firmer demand narrowed reserves across the grid, lifting the system-wide average price to PHP 4.31 per kilowatt-hour from PHP 3.50 per kilowatt-hour in February, according to the Independent Electricity Market Operator of the Philippines. IEMOP released the data on April 8.

WESM is the country’s venue for trading electricity as a commodity, and movements there can filter into retail bills when distribution utilities and electric cooperatives source part of their supply from the spot market.

System-wide average supply slipped 0.4% to 19,913 MW in March, while average demand climbed 4% to 13,383 MW, cutting the supply margin to 4,654 MW from 5,283 MW in February.

“We have observed a slight jump in the average price… brought about by a slight decrease in the overall system supply and increase in the system demand,” Arjon Valencia, IEMOP corporate communications manager, said during a media briefing.

Luzon posted the sharpest regional increase, with the average market price climbing 52.5% to PHP 4.10 per kilowatt-hour from PHP 2.69 per kilowatt-hour in February as average demand rose by 428 MW and supply fell by 184 MW amid planned and forced outages.

Forced outages in Luzon reached 8,124.3 MW in March, while planned outages totaled 976.3 MW across various technologies.

“In Luzon, the behavior of our market is influenced by forced outages across various technologies… [and] congestion required the re-dispatch of more expensive plants because cheaper generation could not be transmitted,” Valencia said.

Cacho said the climb in Luzon prices also reflected seasonal demand. “Mababa yung price natin sa Luzon especially January, February and a little over March kasi definitely ang demand natin mababa, malamig… so when we came in nitong towards April ayan nakakita na tayo, second half ng March nakita na natin pag taas ng demand,” he said.

He linked part of the increase to congestion on a key transmission line. “Nagkaroon kasi ng maintenance ng major line natin that resulted to congestion sa Luzon, that congestion reflected required the dispatch, schedule ng mas mahal na planta, yung mas mura hindi makatawid,” he added.

Outside Luzon, prices moved lower. In the Visayas, the average price eased to PHP 5.08 per kilowatt-hour from PHP 5.37 per kilowatt-hour, while in Mindanao it fell to PHP 4.43 per kilowatt-hour from PHP 5.35 per kilowatt-hour, as supply conditions improved and interconnection lines allowed more imports.

In a separate IEMOP summary, the February comparison points for Luzon and Mindanao were rounded to PHP 2.6 per kilowatt-hour and PHP 5.25 per kilowatt-hour, respectively.

Transmission bottlenecks still shaped regional price differences, including congestion along the Leyte–Cebu corridor and limits on high-voltage direct current transfers, which restricted the flow of lower-cost power between grids.

Throughout March, the Leyte–Luzon HVDC link operated at its maximum Luzon-to-Visayas transfer limit of 250 MW or at a security-limited transfer level for 27.98% of the billing period, down from 53.78% in February, while Mindanao–Visayas HVDC flow operated at its maximum for 21.80% of the time, up from 6.86% in the prior billing period.

Settlement prices also rose. The Effective Spot Settlement Price increased 18% to PHP 4.78 per kilowatt-hour from PHP 4.05 per kilowatt-hour, while spot market volume slipped to 12.7% from 13.7%. Even so, the total trading amount climbed to PHP 13.57 billion from PHP 10.76 billion.

Coal remained the dominant fuel in the generation mix at 57.2% of total output, while renewable energy accounted for about 25%. Solar increased to 6.5%, hydropower fell to 8.1%, and natural gas slipped to 16%, reflecting a shift in generation patterns during the month.

IEMOP said WESM operations were suspended beginning at the 0005H dispatch interval on March 26, 2026, after the government declared a state of national energy emergency under Executive Order No. 110. The ERC later issued Resolution No. 10, Series of 2026, prescribing a modified administered pricing scheme during the suspension.

The Department of Energy said the emergency package was meant to keep the power system stable and protect consumers from price spikes.

Under the framework, coal-fired plants are settled at a fixed administered price of PHP 6,000 per megawatt-hour, while other technologies follow administered pricing rules based on their classification.

Preferential and priority dispatch generators continue under the WESM PDM Manual, with negative intervals reset to zero, while oil-based, natural gas-fired, battery energy storage, and pumped storage hydro facilities may seek additional compensation under existing rules. The mechanism stays in place until the ERC lifts the market suspension.

Valencia said the intervention blunted what could have been a much sharper increase. “In our projections, it reached PHP 9 per kWh… but with the imposition of administered pricing, those conditions were averted,” he said.

Cacho gave a higher stress-case estimate and credited regulators for stepping in. “Sa projections natin umaabot ng P9, sa extreme scenario umabot pa ng P12… but we don’t see na maapply pa yung P9…Naavert yung tinatawag nating seasonal price spike and additional price increase brought about by the increase in fuel costs… ‘yan I think is a very good policy action from our regulators to stabilize prices,” he said.

The effect on consumers will vary by location and by how much electricity their distribution utility or electric cooperative buys from the spot market. The ERC has separately required distribution utilities facing sharp generation-cost increases to submit advance reports and any proposed staggered recovery schemes before bills are released, a step meant to cushion households from sudden rate spikes.