Electricity prices in March rose as tighter supply conditions and higher demand reduced available reserves across the grid, according to the Independent Electricity Market Operator of the Philippines (IEMOP). The operator reported that the system-wide average price increased to PHP 4.31 per kilowatt-hour (kWh), up 23% from PHP 3.50 per kWh in February.

The increase was driven by a narrowing supply margin, as average supply slightly declined while demand rose during the period.

System-wide average supply fell by 0.4% to 19,913 megawatts (MW), while average demand increased by 4% to 13,383 MW. This reduced the supply margin to 4,654 MW, down from 5,283 MW in February.

“We have observed a slight jump in the average price… brought about by a slight decrease in the overall system supply and increase in the system demand,” said Arjon Valencia, Corporate Communications Manager at IEMOP, during a media briefing.

In Luzon, prices saw the steepest increase, with the average market price rising to PHP 4.10 per kWh from PHP 2.69 per kWh, marking a 52.5% increase. The spike was attributed to higher demand and reduced supply, with average demand increasing by 428 MW and supply declining by 184 MW due to planned and forced outages.

Outages also played a significant role during the month, with forced outages in Luzon reaching 8,124.3 MW and planned outages totaling 976.3 MW across various technologies.

“In Luzon, the behavior of our market is influenced by forced outages across various technologies… [and] congestion required the re-dispatch of more expensive plants because cheaper generation could not be transmitted,” Valencia said.

In contrast, electricity prices declined in the Visayas and Mindanao grids.

In the Visayas, the average price dropped to PHP 5.08 per kWh from PHP 5.37 per kWh, while in Mindanao, prices fell to PHP 4.43 per kWh from PHP 5.35 per kWh. These declines were linked to improved supply conditions and increased power imports through interconnection lines.

Transmission constraints also affected market outcomes, including congestion along the Leyte–Cebu corridor and limitations in high-voltage direct current (HVDC) transfers, which contributed to price differences across regions.

Settlement prices also increased during the period, with the Effective Spot Settlement Price (ESSP) rising to PHP 4.78 per kWh from PHP 4.05 per kWh, an 18% increase. Despite a decline in spot market volume to 12.7% from 13.7%, the total trading amount rose to PHP 13.57 billion from PHP 10.76 billion, reflecting higher overall prices.

Coal remained the dominant source of generation, accounting for 57.2% of total output, while renewable energy contributed about 25% to the generation mix. Solar generation increased to 6.5%, while hydropower declined to 8.1% and natural gas slipped to 16%, reflecting shifting generation patterns during the period.

The report also noted that the Wholesale Electricity Spot Market (WESM) was suspended starting March 26, with the Energy Regulatory Commission implementing a modified administered pricing scheme under Resolution No. 10, series of 2026.

Under the scheme, coal-fired plants are settled at a fixed administered price of PHP 6,000 per megawatt-hour, while other technologies follow adjusted pricing rules depending on their classification. 

Valencia said the intervention helped prevent a sharper spike in prices during the period. “In our projections, it reached PHP 9 per kWh… but with the imposition of administered pricing, those conditions were averted,” he said.

The administered pricing framework will remain in effect until the market suspension is lifted.

How will continued supply constraints affect electricity prices in the coming months?

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