Electricity bills are expected to increase this month as system-wide spot prices rose by 22.7 percent to nearly ₱10 per kilowatt-hour (kWh) in June amid tighter supply driven by persistent power outages in Visayas.

According to the Independent Electricity Market Operator of the Philippines (IEMOP), nationwide Wholesale Electricity Spot Market (WESM) prices went up to ₱9.56/kWh in June from ₱7.79/kWh in the previous month.

This was despite overall demand easing by 1.9 percent to 15,454 megawatts (MW) from 15,755 MW in May, while supply declined at a slower rate of 1.1 percent to 21,133 MW from 21,374 MW.

IEMOP market simulation and analysis staff member Rica Cagnayo said the higher electricity spot prices were influenced by localized supply conditions and reserve deficiencies across the regions.

In particular, Cagnayo said frequent forced outages resulted in higher average market prices in Visayas, which surged by 41.7 percent to ₱14.46/kWh from ₱10.20/kWh.

The region’s supply dropped by 7.5 percent to 2,183 MW, while demand softened slightly by 0.5 percent to 2,166 MW, based on IEMOP data.

IEMOP vice president for trading operations Isidro Cacho said the exposure of power utilities to WESM prices is as high as 30 percent in Visayas.

He said this is double the exposure of power companies in Mindanao, which he estimated at 15 percent, even as spot prices there increased by 37.5 percent to ₱12.75/kWh.

Among the regions, Luzon posted the lowest spot price at ₱7.95/kWh, backed by an increase in region-wide supply to 15,659 MW from 15,509 MW.

These electricity spot prices will be reflected in power generation charges this month, which account for the largest portion of consumers’ electricity bills.

For Manila Electric Co. (Meralco), the country’s largest power distributor, generation charges represent 64 percent of the power bill.

Operated by IEMOP, WESM is the country’s centralized venue for electricity trading, where power utilities such as Meralco can source their energy requirements.

Cacho said Meralco’s exposure to WESM prices is only around seven percent since it also sources power from other producers.

“Last month has been a very volatile month for our market, but it’s part of the process of ensuring that there is adequate supply for the public and their electricity needs,” he said in a press briefing on Thursday, July 9.

For July, Cacho said spot prices will likely decline as demand continues to ease with the onset of the rainy season, reducing the strain on supply across the country.