Baguio City — Electricity costs are poised to climb next month as rising temperatures drive up consumption and geopolitical instability in the Middle East threatens global fuel supplies.

On the sidelines of the Philippine Electric Power Industry Forum (PEPIF) on Thursday, March 12, Energy Regulatory Commission (ERC) chairperson Francis Saturnino Juan said Wholesale Electricity Spot Market (WESM) prices could increase by ₱2 to ₱4 per kilowatt-hour.

Juan said the combination of seasonal demand—as the country enters its peak summer period—and scheduled power plant maintenance, along with volatile global commodity prices, is creating significant upward pressure on rates.

While the market saw some relief in February with average rates at ₱3.50 per kWh, the outlook for April suggests a sharp reversal.

“The recent global events, on top of seasonal power demand and power plant outages, could put pressure on next month’s spot market prices," Juan told reporters.

He noted that while there are no immediate threats to supply, the cost of generating that power is rising.

Likewise, thermal power plants, which form the backbone of the Philippine grid, are increasingly sensitive to the prices of coal, natural gas, and oil. Crude oil prices have recently surpassed $100 a barrel amid regional conflicts, directly impacting the “offer prices” of oil-based generators.

Juan indicated that the ERC’s secondary price cap—a regulatory mechanism designed to prevent excessive price spikes—remains a critical tool to protect consumers if WESM rates breach certain thresholds.

The IEMOP simulation suggested that under current conditions, market-clearing prices could jump from ₱4.98 to as high as ₱7.93 per kWh.

Despite the price warnings, industry leaders emphasized that the physical supply of fuel remains stable. The Philippine Independent Power Producers Association (PIPPA) has provided assurances that fuel stocks are sufficient to prevent rolling blackouts.

The extent to which these spot market spikes hit household bills depends on how much electricity a distribution utility buys from the WESM versus long-term bilateral contracts.

Utilities with robust Power Supply Agreements (PSAs) may see more stable generation costs compared to those heavily exposed to the volatile spot market.

“Whatever the movement in the WESM prices, it won’t necessarily translate to our generation," Juan said. “What we’re monitoring is their exposure.”

Meanwhile, Meralco PowerGen Corp. (MGen), the generation arm of the country’s largest distributor, stated its facilities remain fully operational despite the external shocks.

Emmanuel Rubio, MGen president and chief executive officer, said the company is prioritizing “high availability” and rigorous maintenance to ensure the grid remains stable through the high-demand months.

The ERC has signaled it may consider staggered recovery plans for utilities if the price hikes prove too “exorbitant” for the public to absorb at once.