Plant outages push power rates higher in June 2026

By Francis Allan L. Angelo

Electricity rates in Iloilo City are set to rise this June after outages at four of the largest power plants in the Visayas drove wholesale spot market prices to their ceiling of PHP 32 per kilowatt-hour (kWh), according to MORE Electric and Power Corp. (MORE Power).

Justin Laurence Lunar, energy sourcing supervisor at MORE Power, said in the utility’s “At Your Service” program that preliminary data showed the generation charge increasing by about PHP 2 per kWh, from PHP 5.60 last month to around PHP 7.70.

Lunar stressed that the figure was based on incomplete, preliminary data, but said the increase on the generation side was already certain.

The generation charge is a pass-through cost, meaning it is paid to power suppliers and not retained by the distribution utility.

Lunar said prices in the Wholesale Electricity Spot Market (WESM), which can drop to as low as negative PHP 10, have been hitting the maximum of PHP 32 per kWh, mostly in the afternoon when solar plants stop generating and more expensive diesel plants run to fill the gap.

There were also instances when charges exceeded the cap because of line losses and congestion costs in transmission lines, he added.

The price spikes followed the outage of four of the biggest power plants in the Visayas, with one more unit going down on May 28, tightening supply in the Cebu-Negros-Panay grid.

The thin margin between supply and demand has triggered yellow and red alert statuses, manual load dropping, and rotational power interruptions in parts of Iloilo City.

Lunar said the Visayas grid has been placed under yellow alert almost every afternoon for several weeks, which he described as the longest stretch of alerts the industry has experienced in years, based on their monitoring.

He said the strong summer demand, combined with the reduced supply, pushed prices upward under the law of supply and demand.

The lifting of the modified administered price (MAP), a temporary pricing mechanism in the spot market, also contributed to the upward trend.

Lunar said the administered price “does not reflect the actual market situation” because it is based on historical prices, and noted that supplier bids rose slightly after the mechanism was lifted as generators sought to recover.

On the transmission side, he said no data was available yet, but an increase was possible since transmission rates are based on total energy consumption, which rose during the period.

MORE Power’s distribution charge, however, will not increase, as it has remained unchanged for the past four years except for refunds ordered by the Energy Regulatory Commission (ERC).

To cushion the impact on consumers, MORE Power has sent a letter to the ERC requesting staggered payment of its WESM billings on the generation side.

If approved, the adjustment would be spread out in consumers’ bills instead of being charged in a single tranche.

The utility said its bilateral supply contracts have been maximized and carry only minimal rate changes, with the biggest price impact coming from the spot market.

Lunar said the ERC has been monitoring the market situation and, since the start of the conflict in the Middle East, has issued an order requiring distribution utilities to submit reports if their blended generation rate increases by more than PHP 1.

He said one of the major power plants on outage is expected to return to service in July, based on its operator’s declaration.

The onset of the rainy season is also expected to temper demand and allow consumers to cut back on air conditioning.

In the meantime, Lunar advised consumers to conserve electricity, since the duration and extent of the price increases remain uncertain.

MORE Power said the situation is not unique to its franchise area, as other distribution utilities are facing the same increases on the generation and transmission sides.