The Power Assets and Liabilities Management Corporation (PSalm) has pledged to ensure a "sufficient supply" of energy to Davao Light and Power Co., responding to an appeal from the local government and the electric distributor to maintain current supply levels. This development comes after concerns over potential reductions that could have led to increased electricity costs for consumers in Davao City.
Councilor Confirms Stable Supply Agreement
Councilor Louie John Bonguyan, who chairs the 21st Davao City Council’s Committee on Energy and Water, announced that PSalm has formally responded to the appeal. During the Pulong-Pulong sa Dabawenyos event on April 8, 2026, held at the Sangguniang Panlungsod, he stated, "Wala nabawasan, wala nadagdagan ang supply na ilang ihatag sa Davao Light (There has been no decrease and no increase in the supply that they will provide to Davao Light)." This confirmation indicates that PSalm will not alter the existing supply volume, providing stability for the region's power infrastructure.
Potential Rate Adjustments and Market Dynamics
Bonguyan further noted that he engaged in discussions with Davao Light, which informed him of a possible minimal increase in power rates this April. However, the exact amount remains undetermined due to fluctuating prices in the Wholesale Electricity Spot Market (WESM). This uncertainty highlights the broader challenges in energy pricing, where market volatility can impact consumer costs.
Background on Supply Concerns and Council Action
Earlier, on January 21, 2026, the 21st City Council passed a resolution urging PSalm to refrain from reducing Davao Light’s power supply contract. The council warned that such a reduction could trigger higher electricity rates in the city, emphasizing the critical role of PSalm as a source of affordable power. PSalm currently provides approximately 30 percent of Davao Light’s total power supply, making it a vital component for maintaining cost-effective energy in Davao City.
Risks of Supply Reduction and Alternative Sources
If PSalm had proceeded with the planned supply cut starting in 2026, Davao Light would have been forced to source more electricity from the WESM, where power prices are significantly higher. This shift could have burdened consumers with increased bills. The reduction was attributed to the aging condition of PSalm’s power plants, which has led to decreased generating capacity. Notably, PSalm supplies some of the cheapest power in the market, largely sourced from the Agus–Pulangi hydropower complex, underscoring its importance for affordability.
Davao Light’s Diverse Power Portfolio
Davao Light explained that it draws power from multiple sources to ensure reliability and cost-efficiency. About 50 percent of its supply comes from renewable energy, including PSalm and Hedcor hydroelectric plants in southern Mindanao. Additionally, 20 to 30 percent is sourced from the Therma South coal plant, while the remaining supply is procured from the WESM. The company emphasized that relying on a single power supplier is not advisable, as an outage in one plant could disrupt electricity service across the entire coverage area. Having multiple sources ensures that power remains available even if one facility goes offline, enhancing grid resilience and consumer protection.
This strategic approach to energy sourcing helps mitigate risks and supports sustainable power management in the region.
