The Davao Consumer Movement (DCM) is calling for immediate government intervention as multiple power sector adjustments converge to drive electricity costs to new heights across the region. The consumer advocacy group has urgently requested the Department of Energy (DOE) and Energy Regulatory Commission (ERC) to reassess electricity bill components amid escalating pass-on charges.
Three Major Factors Driving Power Costs Upward
DCM identified three significant developments occurring within weeks that collectively threaten to substantially increase consumer electricity expenses. These include a dramatic surge in Wholesale Electricity Spot Market (Wesm) prices, the reinstatement of the Universal Charge–Environmental Charge (UC-EC) after five years, and newly approved transmission rate increases.
The consumer group emphasized that all three charges directly pass through to consumers, creating a cumulative burden that ordinary households struggle to absorb. DCM noted that regular families are beginning to feel significant financial strain from these consecutive adjustments.
Wesm Prices Spike Following Supply Disruptions
According to the Independent Electricity Market Operator of the Philippines (IEMOP), average Wesm prices jumped 49.4% in October to reach P4.54 per kilowatt-hour. The situation proved even more severe in Mindanao, where spot market prices climbed 40% to P5.87 per kWh.
This price surge stemmed from major power plant outages and transmission disturbances triggered by the September 30 earthquake in the Visayas. The seismic event caused multiple tripping incidents across generating units and transmission lines, tightening available power supply precisely when demand was increasing.
Between September 26 and October 25, available power supply decreased by 4% to 19,889 megawatts while electricity demand simultaneously increased by 1.8%, peaking at 13,881 MW. DCM warned that this upward movement in market pricing is already translating into higher generation charges for consumers.
Environmental Charge Returns After Five-Year Suspension
Another cost pressure emerged on November 7 when the ERC resumed collection of the P0.0025/kWh Universal Charge–Environmental Charge (UC-EC). This charge had been suspended since May 2020.
Distribution utilities and the National Grid Corporation of the Philippines (NGCP) will undertake collection, with proceeds remitted to the Power Sector Assets and Liabilities Management Corp. (Psalm). ERC Chairperson Francis Saturnino Juan explained that the reinstated UC-EC will fund rehabilitation and management of watershed areas under the National Power Corporation (NPC).
Transmission Rates Increase Due to Higher Service Costs
NGCP also implemented a 7.91% increase in transmission rates beginning November, raising the overall transmission charge to P1.5105/kWh. This adjustment primarily results from a 15.23% increase in ancillary service (AS) charges, which cover standby power required to stabilize the national grid.
Transmission wheeling rates, representing the cost of delivering electricity from generators to distributors, also rose 0.57% to P0.5953/kWh. DCM argued that these combined changes place additional pressure on both household and business consumers throughout the region.
Davao Light Confirms November Rate Increase
Davao Light and Power Co. confirmed that its residential rate for November stands at P10.0612/kWh, representing an increase of P0.9080/kWh from October's P9.1532/kWh. This new rate covers the billing period from November 11 to December 10.
The utility identified rising Wesm prices and higher NGCP transmission charges as primary drivers behind the increase. Additional upward pressure came from the ERC-approved Feed-In Tariff Allowance (FIT-All), which increased from P0.1189/kWh to P0.2073/kWh, along with the reinstated UC-EC of P0.0025/kWh.
Davao Light clarified that electricity bills consist of generation, transmission, distribution, and government or other charges. The company emphasized that generation, transmission, and government charges represent pass-on items collected on behalf of other entities, while their own distribution charge has remained unchanged since ERC approval in 2013.
The utility encouraged customers to adopt electricity-saving measures during the upcoming holiday season to avoid unexpectedly high bills. Davao Light, currently celebrating its 79th year of operations, is preparing to expand service coverage throughout Davao del Norte and Davao de Oro provinces.
To mitigate the growing financial burden on consumers, DCM reiterated its call for policy reforms and specifically suggested reviewing proposals to remove the 12% value-added tax (VAT) on electricity. The group warned that unless government acts swiftly, both consumers and businesses will struggle to keep pace with rising power costs.
