Luzon’s plummeting spot market prices are set to provide buffer against electricity rate hikes this month, though persistent grid bottlenecks mean the Visayas and Mindanao regions will be excluded from the relief.

According to data released by the Independent Electricity Market Operator of the Philippines (IEMOP), the system-wide average price in the Wholesale Electricity Spot Market (WESM) edged down to ₱3.50 per kilowatt-hour (kWh) in the February billing period, a slight decrease from ₱3.56/kWh a month ago. While aggregate demand grew by three percent, the market benefitted from a 4.4 percent increase in overall supply, which reached 19,992 megawatts.

The narrative diverged sharply in the central and southern Philippines. Visayas and Mindanao saw a contraction in power supply capacity that exerted upward pressure on spot prices.

In the Visayas, WESM prices surged 26.6 percent to ₱5.37/kWh, a spike that will be passed on to consumers in their upcoming electricity bills.

Meanwhile, Mindanao saw a similarly aggressive expansion, with prices climbing 23.2 percent to ₱5.25/kWh. These price hikes occurred even as cooling demand saw a modest decline of 1.7 percent in the Visayas and 1.4 percent in Mindanao.

IEMOP attributed the tightening market conditions to thinning supply margins, which declined by 37 megawatts in the Visayas and 133 megawatts in Mindanao. The operator cited a combination of higher outage levels and volatile flows across the nation’s high-voltage direct current (HVDC) links.

Transmission constraints played a role in isolating the two regions from cheaper power sources. The Leyte-Luzon HVDC link operated at its maximum security-limited transfer level of 250 megawatts, while the Mindanao-Visayas interconnection also ran at full capacity, effectively bottlenecking the flow of lower-cost electricity across the archipelago.

Infrastructure reliability remains a pressing concern as forced outages continue to sideline significant capacity. In the Visayas, forced outages reached 1,640.1 megawatts, compounded by 289.23 megawatts of planned maintenance at coal and geothermal plants.

Mindanao recorded 495.8 megawatts of forced outages from coal and hydroelectric facilities, alongside 105 megawatts of scheduled downtime. While Luzon also grappled with 4,696.9 megawatts of outages, it managed to slash its spot market prices by 17.2 percent to ₱2.69/kWh. This was driven by a robust right percent surge in supply to 14,286 megawatts, which more than offset a five percent increase in regional demand.