The Energy Regulatory Commission (ERC) said yesterday the national average generation rate in 2024 declined by 11.5 percent to P6.64 per kilowatt hour (kWh) from P7.50 per kWh in 2023.
The regulatory body said in a statement this occurred despite the temporary cost surge during the summer months of 2024.
Based on reports from distribution utilities (DUs) and monitored prices on the Wholesale Electricity Spot Market, most areas in the Philippines saw a significant drop in generation rates in 2024, the ERC said.
All island groups enjoyed lower power costs last year, led by Mindanao, with a 14.9 percent decline in its yearly average generation rates, followed by Luzon with 11.7 percent and Visayas with 7.3 percent, the ERC said.
In Mindanao, all regions posted double-digit cuts in average power costs, except for the Bangsamoro Autonomous Region in Muslim Mindanao, which saw a 14.6 percent hike last year.
Similarly, most regions in Luzon recorded reductions in electricity cost, except for Mimaropa, where off-grid distributors faced 15.7 percent higher generation rate.
In the central Philippines, only Western Visayas experienced higher power rates, with a moderate 2.3 percent adjustment.
The ERC said “relative stability of electricity prices aligns with the downward trend of coal prices on the international market.”
It said with coal still being the dominant fuel in the Philippine power mix, the country relied heavily on Indonesian coal, which dropped from its record yearly average price of $276.6 per metric ton (MT) in 2022 to $121.5 per MT in 2024.
However, the current benchmark price of Indonesian coal was still higher than pre-pandemic levels, which stood below $100 per MT before the surge in global fuel prices.
“While electricity prices surged in mid-2024, prices continued their downward trajectory by year-end. Power outages during the dry season followed by higher global coal prices and weaker peso from June onwards led power costs to soar during second quarter until the early part of third quarter last year,” the ERC said.
The regulatory body added that such factors caused upward pressure in the electricity prices of select areas in Luzon and Visayas, where average generation rates saw at least a 10 percent increase between the second and third quarters of 2024.
In Luzon, heavily affected areas included Metro Manila, Central Luzon, Calabarzon and Bicol.
Both Central and Eastern Visayas saw higher electricity rates by the third quarter of 2024, while Western Visayas recorded a similar hike as early as the second quarter. However, all affected areas saw a decline in electricity rates by the fourth quarter, bringing generation rates closer to or lower than start-year levels and sustaining their downward trajectory in the entire year.
ERC chair Monalisa Dimalanta said they continue to validate reports received from more than 120 DUs all over the country to ensure that only just and reasonable costs are passed on to consumers.
“Diligence in power supply procurement and optimal dispatch of suppliers to ensure least cost pricing are critical obligations of DUs to their captive customers. The ERC will continue to enforce its regulatory authority to ensure these obligations are upheld,” Dimalanta said.
