The Energy Regulatory Commission (ERC) is reviewing possible market reforms, including forward and futures contracting arrangements, to help safeguard consumers from sudden spikes in electricity bills caused by price volatility in the power market.
Speaking at a roundtable discussion on preventing bill shock at the Bonifacio Global City, ERC Chairperson Francis Saturnino Juan said sharp bill increases reflect deeper systemic issues in the power sector affecting both consumers and utilities.
“In the electricity sector, sudden increases in consumer bills reflect more than short-term price movements,” Juan said.
“They reveal underlying systemic vulnerabilities that transfer burden to end users, resulting in what we call ‘bill shock’,” the ERC chief added.
He emphasized these problems occur when price volatility or frequent price fluctuations is not properly managed, leaving consumers exposed.
“We are all acutely aware of a persistent challenge in our electricity sector: the volatility of market clearing prices in the Wholesale Electricity Spot Market,” Juan said.
As part of possible solutions, the ERC is closely examining forward and futures contracting—mechanisms that allow electricity providers to agree on prices for future supply in advance.
“We focus our collective attention on a concept that merits serious and thorough study: the potential for forward and futures contracting arrangements for electricity,” he stressed.
Juan noted that it could help stabilize consumer costs, reduce utilities’ exposure to sudden market swings, and encourage investment in new power generation, including baseload and renewable energy projects.
However, he stressed that adopting these arrangements would require careful regulatory design.
“The current pass-through nature of the DU’s generation costs presents a fundamental consideration,” Juan said, underscoring the need to balance consumer protection with prudent utility practices.
He emphasized that preventing bill shock is a shared responsibility that requires coordinated action across the power sector.
“Rather than viewing volatility purely as a risk, preventing bill shock presents an opportunity to innovate—to strengthen market design, improve regulatory processes, and reinforce safeguards that protect consumers while supporting long-term investment and reliability,” Juan concluded.
