Manila: The Department of Energy (DOE) has backed a regulatory shift to impose regional electricity price caps, a move expected to shield Visayas and Mindanao consumers from massive bill spikes caused by severe power plant outages.

According to Philippines News Agency, the DOE lauded the Energy Regulatory Commission's (ERC) decision to implement the Secondary Price Cap (SPC) on a per-grid basis, effectively cutting average spot market rates by over half. The department emphasized that consumers in the Visayas and Mindanao should not have to bear extraordinary electricity prices when supply becomes tight. Energy Secretary Sharon Garin noted that the regional price cap provides immediate protection for these consumers and highlighted efforts to strengthen power supply by bringing unavailable plants back online, building up battery reserves, and addressing recurring and prolonged outages.

The ERC announced that the SPC will be implemented starting the August 2026 billing cycle. This policy aims to lower the Wholesale Electricity Spot Market (WESM) prices in Luzon, which remain stable due to adequate power supply, potentially pulling down rates in the Visayas and Mindanao where prices have been rising due to ongoing supply issues.

Under the Commission's simulation, the SPC could reduce the average WESM price in the Visayas for August by around half, from PHP18.59 per kilowatt-hour (kWh) to PHP8.47/kWh. For Mindanao, the average price may decline to PHP8.69/kWh from PHP19.56/kWh. The regulator indicated that the impact of these changes will vary depending on the distribution utilities' WESM exposure and the overall supply mix in the grids.