The Energy Regulatory Commission (ERC), led by Chairperson and CEO Atty. Francis Saturnino Juan, together with Commissioners Floresinda Baldo-Digal, Marko Romeo Fuentes, Amante Liberato, and Paris Real, discussed measures to accelerate renewable energy (RE) integration and ensure least-cost power supply during its 29th Open Commission Meeting (OCM 29-2026).
The session was conducted in a hybrid format and streamed live to uphold transparency and broaden public access.
During its review of Power Supply Agreement (PSA) applications, the ERC discussed proposals involving diesel-based generation in off-grid areas, noting that rising diesel costs are driving up subsidy requirements and posing challenges to efforts to manage and gradually reduce subsidy levels.
The Commission emphasized that continued approval of such arrangements without a clear transition pathway risks locking in a structure where generation remains heavily subsidized, with limited incentive to shift toward cleaner alternatives.
“Kung puro diesel at subsidy ang umiikot, hindi natin nababago ang sistema—tumataas lang ang pasanin ng mga consumer.”
“Kung mas may mura na renewable energy, iyon ang dapat i-prioritize. Kung puro diesel at subsidy ang umiikot, hindi natin nababago ang sistema—tumataas lang ang pasanin ng mga konsumer,” Juan said.
In response, the Commission also discussed the need to strengthen the transition framework in off-grid areas. This includes exploring incentive provisions under the Renewable Energy Act and ensuring that contracts are not limited to capacity requirements, but also embed least-cost supply obligations that benefit consumers.
“Without this shift, reliance on subsidized diesel generation may continue to drive higher subsidy exposure while discouraging the entry of cleaner energy players and delaying a meaningful market transition.”
According to the ERC chief, without this shift, reliance on subsidized diesel generation may continue to drive higher subsidy exposure while discouraging the entry of cleaner energy players and delaying a meaningful market transition.
Through these deliberations, the ERC reaffirmed its commitment to a more responsive regulatory framework that supports a structured energy transition—reducing subsidy pressure, improving cost efficiency, and accelerating renewable energy adoption, particularly in off-grid areas.
