Residents of Davao City are bracing for significantly higher electricity bills this January 2026, even as the cost of transmitting power across the national grid saw a slight decrease. The overall residential rate charged by Davao Light and Power Co., Inc. has climbed to a notable high, driven primarily by volatile generation costs and the introduction of a new government-mandated charge.
Transmission Relief Overshadowed by Soaring Generation Costs
Data from the National Grid Corporation of the Philippines (NGCP) shows that the average transmission rate for the December 2025 billing period, which appears on January 2026 statements, decreased by 0.68 percent. The rate moved from P1.3547 per kilowatt-hour (kWh) to P1.3455/kWh. This charge is composed of two main parts: a fee for Ancillary Services (P0.5971/kWh) and the transmission wheeling charge (P0.6058/kWh).
NGCP emphasized that its direct charge for delivering services is only about 60 centavos per kWh and that all its revenues are regulated by the Energy Regulatory Commission (ERC). The company also clarified that transmission costs are pass-through fees and it does not profit from market-driven components like Ancillary Services.
However, this minor reduction was completely offset by a sharp jump in generation charges. Davao Light reported that the overall residential rate for the billing period from January 11 to February 10, 2026, skyrocketed to P11.7187/kWh. This marks an increase of P2.0052 from the P9.7135/kWh rate in December 2025, representing one of the steepest monthly hikes in recent years.
Key Drivers: WESM Volatility and New Government Charge
The utility pointed to two major factors behind the painful increase. The primary culprit was the significantly higher cost of power purchased from the Wholesale Electricity Spot Market (WESM). Several power plant outages in the previous month constrained supply, forcing distributors to buy more electricity from the spot market where prices had surged.
Compounding the market volatility was the implementation of a new pass-through charge on consumer bills. This is the Green Energy Auction Allowance (GEA-All), established under ERC Case No. 2025-127 RC dated December 26, 2025. The charge is designed to fund the government's program for procuring renewable energy and accelerating the shift to cleaner power sources.
Although consumers received some relief from a lower Feed-In Tariff Allowance (FIT-All) rate and a small Renewable Energy Certificate (REC) refund, these savings were too minor to counter the combined force of high WESM prices and the new GEA-All. Davao Light reiterated that it does not retain generation charges, remitting them fully to power suppliers, and passes government fees directly to the concerned agencies.
Consumer Impact and Energy-Saving Advice
The latest adjustment has pushed Davao City's electricity rate to its highest recorded level amid consecutive monthly increases, reviving public concerns about affordability. This is especially sensitive as Davao Light expands its service area following its takeover of the Northern Davao Electric Cooperative (Nordeco) franchise. Consumer groups like the Mindanao Alliance for Progress (MAP) have called for transparency, ensuring that costs for upgrading Nordeco's old system are not unfairly passed on to existing Davao City customers.
In response to the hike, Davao Light is urging customers to actively manage their energy consumption. Fermin Edillon, head of the utility's Reputation Enhancement Department, advised that simple daily discipline can make a significant difference. "Let us focus on simple daily habits and maximizing natural resources such as sunlight and air," Edillon said.
The company recommends practical steps to reduce usage:
- Unplug idle appliances to eliminate phantom load.
- Maximize the use of daylight and natural ventilation.
- Iron clothes in one continuous session instead of multiple short ones.
- Limit repeated boiling with electric kettles, a major contributor to high consumption.
- Choose properly sized appliances for your needs.
As of the latest reports, Davao Light had not yet provided further clarification on the record-high rate, which continues to place a financial burden on households and businesses across the city.
