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Manila Bulletin devider Business devider The Economy devider May electricity costs decline amid higher supply, lower demand

May electricity costs decline amid higher supply, lower demand

Published Jun 19, 2025 01:08 pm
The Energy Regulatory Commission (ERC) announced that average generation rates charged by distribution utilities (DUs) decreased in May amid stable prices in the electricity spot market.
Preliminary data from the ERC showed that the monthly average generation rate for the National Capital Region (NCR) dropped from ₱7.8 per kilowatt-hour (kWh) in April to ₱7.5/kWh in May.
The continuing decline in generation rates since 2023 results from improved general market conditions and increased supply in the system, as well as the Commission’s diligent enforcement of rules and more timely action on filings with the ERC,” ERC Chairperson Monalisa Dimalanta said.
The ERC attributed this downward adjustment primarily to a healthy supply margin in the Wholesale Electricity Spot Market (WESM), which supported lower system-wide average spot prices. Additionally, declining imported coal prices and a strengthening peso further contributed to the reduction in electricity costs.
While several regions recorded higher generation rates in April due to the hot season, most saw relief in May. However, regions like MIMAROPA and BARMM posted a slight uptick in generation charges last month.
All three grids (Luzon, Visayas, Mindanao) recorded higher average supply and lower demand in May this year compared to the same period last year, resulting in lower average spot prices nationwide, the ERC noted.
Supply in May 2024 stood at 22,218 megawatts (MW), a notable increase from 19,648 MW in May 2023. Concurrently, demand fell year-on-year, with 15,169 MW last month compared to 15,688 MW in the previous year.
Beyond domestic market dynamics, favorable external cost drivers also helped temper electricity rates. The Indonesian coal saw its lowest monthly average price for the year at $115.8 per metric ton, coinciding with a stronger Philippine peso at ₱55.6 per US dollar.
These factors helped ease generation costs, alongside a slight recovery in WESM supply margin following the tight conditions observed during the peak of the dry season, the ERC added.
Despite May's positive price drops, the ERC vowed to remain proactive in monitoring market movements to protect consumers from rising electricity costs.
Even as we see these improvements, the ERC will not relax its proactive stance of close monitoring, particularly of global fuel prices, bilateral contracting, and market behavior, to ensure the delivery of least-cost electricity to consumers, Dimalanta concluded.

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