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Manila Bulletin devider Business devider The Economy devider ERC: Lower spot market prices pull generation rates down

ERC: Lower spot market prices pull generation rates down

Published May 14, 2025 10:42 am

At A Glance

  • The Energy Regulatory Commission (ERC) noted that generation charges, which are the cost of generated electricity that is sold by power producers to distribution utilities (DUs), fell by 7.7 percent compared to the first quarter of last year.

The Energy Regulatory Commission (ERC) reported that generation rates have significantly gone down for the first quarter of 2025 due to lower prices in the Wholesale Electricity Spot Market (WESM).

In a statement, the ERC noted that generation charges, which are the cost of generated electricity that is sold by power producers to distribution utilities (DUs), fell by 7.7 percent compared to the first quarter of last year.

In Luzon, generation rates dropped by 11.5 percent, Visayas decreased by 8.1 percent, while Mindanao saw a minimal 0.5- percent decline.

“Most areas in Luzon, which have high exposure to lower WESM prices, experienced sharp declines in generation costs. However, Metro Manila—the on-grid Luzon area with the lowest WESM exposure,” the ERC stated.

According to the regulator, the lower spot market prices offset the higher fuel prices and weaker peso, as well as the higher liquefied natural gas (LNG) landed costs, and the impact of higher Indonesian coal prices—which is the dominant power source.

The ERC further noted that through these rate decreases, most regions experienced the lowest rates since the spikes that happened during the Covid-19 pandemic.

“This was particularly evident in Luzon and Visayas, where most DUs, having higher exposure to the WESM, benefited from significant quarter-on-quarter reductions in generation costs since the first quarter of 2024,” it added.

ERC Chairperson and Chief Executive Officer (CEO) Monalisa Dimalanta explained that more power supply helped ease prices.

“The downward trend in generation rates in the first quarter of this year reflects the benefits of new or additional power supply and steady operations of the spot market. Despite external cost pressures, we saw a significant drop in average generation rates, and this demonstrates that effective market monitoring works,” she added.

Related Tags

Energy Regulatory Commission (ERC) Wholesale Electricity Spot Market (WESM) Monalisa Dimalanta
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