The Energy Regulatory Commission has ordered distribution utilities (DUs) to submit detailed reports on significant generation cost increases, following the declaration of a State of National Energy Emergency under Executive Order No. 110, Series of 2026.

The directive requires utilities experiencing a blended generation rate increase of more than PHP1.00 per kilowatt-hour compared to the previous supply month to submit documentation to the regulator before passing the cost adjustment to consumers.

The move modifies the current automatic generation cost pass-through mechanism, giving regulators earlier visibility into rate adjustments and enabling intervention when necessary to protect consumers.

Under the directive, affected distribution utilities must submit detailed information explaining the basis of their rate adjustments.

Required documents include:

• Detailed computations of the generation rate increase
• Supporting invoices from power suppliers
• Any proposed staggered recovery arrangements agreed upon with suppliers.

Utilities must submit these documents electronically at least five days before the intended release of monthly consumer bills.

The requirement allows regulators to review and validate the cost increases before they appear in electricity bills.

The measure forms part of the government’s response to rising global fuel prices linked to ongoing hostilities in the Middle East.

Higher fuel costs affect power generation expenses, particularly for plants that rely on imported fuel sources. These increases are typically reflected in electricity bills through the generation charge component.

The generation charge represents the largest portion of electricity bills, making fluctuations in power supply costs highly visible to consumers.

When generation charges increase by more than PHP 1 per kilowatt-hour, the impact can significantly affect monthly household electricity expenses.

To help reduce the immediate impact on consumers, the ERC is encouraging distribution utilities to coordinate with power suppliers on staggered recovery schemes.

Under this arrangement, utilities can spread the recovery of higher generation costs over several billing cycles instead of charging the full increase in a single month.

This approach allows households and businesses to adjust to higher electricity costs gradually while still allowing utilities to recover legitimate supply expenses.

ERC Chairperson and CEO Atty. Francis Saturnino C. Juan said the directive reflects the Commission’s effort to strengthen oversight during a period of global energy market volatility.

“In times of global volatility, our foremost responsibility is to protect Filipino consumers while ensuring the continued stability of our power sector. By requiring early and transparent reporting from DUs, the Commission is better positioned to review rate increases, validate their basis, and implement measures—such as staggered recovery—that will help ease the burden on consumers.”

The advance reporting mechanism allows regulators to monitor electricity price movements more closely and determine whether additional mitigating measures may be required.

The ERC said it will continue working with the Department of Energy and other government agencies to ensure stable and reliable power supply during the energy emergency.

The directive forms part of broader efforts to safeguard electricity affordability while maintaining stability in the country’s power sector.

By strengthening transparency requirements for distribution utilities, regulators aim to balance consumer protection with the need to maintain a financially viable electricity market during periods of global fuel price volatility.

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