Luzon electricity rates rose in January as unplanned plant outages squeezed the regional power grid, even as supply conditions improved in the Visayas and Mindanao, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

In a briefing on Wednesday, Feb. 4, Isidro Cacho Jr., IEMOP trading operations head, said the Wholesale Electricity Spot Market prices in Luzon increased nine percent to ₱3.25 per kilowatt-hour from ₱2.98 the previous month.

The price hike occurred despite an eight percent decline in demand to 8,574 megawatts, as the available supply margin tightened significantly during the period.

The regional supply capacity in Luzon dropped eight percent to 13,228 megawatts from 14,422 megawatts, driven largely by surge in both forced and scheduled maintenance.

Forced outages from coal and natural gas units reached 4,811 megawatts, while planned outages across various technologies totaled 2,754.1 megawatts, according to Arjon Valencia, IEMOP corporate planning and communication manager.

The tighter supply condition forced the market to dispatch oil-based and other higher-marginal-cost plants more frequently to meet requirements, Valencia said.

Cacho described the price movement as a “small increase” that remains reflective of current market dynamics and the impact of the outages on the grid's margin.

The outlook for the capital region may find some relief following the Energy Regulatory Commission’s approval of a second interim extension for a power supply agreement between Manila Electric Co. and the 1,000-megawatt Sta. Rita gas plant.

Cacho said he remains optimistic that the region will maintain ample supply in the coming months, which may help the grid avoid the yellow and red alerts that signal a deficiency in reserves.

While Luzon faced upward price pressure, the rest of the country saw double-digit declines in spot prices.

In the Visayas, market rates tumbled 41.2 percent to ₱4.24 per kilowatt-hour as a 5.9 percent decline in demand to 1,861 megawatts helped offset a 6.4 percent drop in supply.

Mindanao recorded the sharpest drop, with prices falling 45.5 percent to ₱4.27 per kilowatt-hour. The southern island benefited from an 8.4 percent increase in supply to 3,563 megawatts, while electricity demand eased by 3.8 percent to 2,056 megawatts.