The Energy Regulatory Commission (ERC) has approved a new market transaction fee of PHP0.0071 per kilowatt-hour (kWh) for the operation of the country’s electricity market from 2025 to 2027.

The rate, which is lower than the PHP0.0087/kWh originally proposed by the Independent Electricity Market Operator of the Philippines (IEMOP) and the Philippine Electricity Market Corporation (PEMC), will fund the operations of the Wholesale Electricity Spot Market (WESM). These include its reserve and retail components. Under the ERC’s final approval, IEMOP will receive PHP0.0040/kWh while PEMC will receive PHP0.0021/kWh from the total fixed market fee charged to power generators.

ERC Chairperson Atty. Francis Saturnino Juan said the Commission trimmed portions of the two market operators’ proposed budgets after review. “We disallowed for IEMOP’s budget a total of PHP15,289,270 and for PEMC PHP85,414,000,” Juan said during the October 20 briefing at the ERC main office. The combined PHP100.7 million in disallowed expenses covered items the ERC deemed either unsubstantiated or beyond reasonable levels. After adjustments, the approved combined budget for both organizations amounted to PHP3.307 billion for the three-year period.

Juan explained that approving the new market fees before the start of the year would help the market operators plan their spending responsibly and sustain technical expertise within the sector. “At least for 2026 and 2027, mayroon nang malinaw na approval kung ano lang ang dapat na gastusan ng IEMOP at PEMC,” he said. “This way, they can plan their expenses properly and retain experienced staff who help keep the market efficient.” He also noted that the fees are charged to generators, who may decide whether to absorb the cost or pass it on to their customers through supply contracts.

In the last approved cycle, the total market fee reached PHP1.015 billion, equivalent to roughly PHP0.0080/kWh. The new PHP0.0071/kWh rate therefore reflects a slight reduction, following tighter evaluation of proposed spending and updated energy projections for the coming years. Juan said the move supports a more predictable and transparent power market, aligning with the ERC’s broader effort to strengthen oversight and improve regulatory efficiency.

What do you think about the ERC’s move to lower IEMOP’s market fee while tightening budget scrutiny on electricity market operations?

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