In response to the declaration of a State of National Energy Emergency under Executive Order No. 110, Series of 2026, the Energy Regulatory Commission (ERC) has modified the current automatic generation cost pass-through mechanism and directed all distribution utilities (DUs) experiencing a significant increase in generation costs to submit detailed reports to enable timely regulatory intervention and consumer protection.
The directive specifically applies to DUs with an increase in their blended generation rate of more than one peso per kilowatt-hour (P1.00/kWh) compared to the previous supply month. These DUs are required to submit the basis for their rate adjustments, including detailed computations, supporting invoices from power suppliers, and any proposed staggered recovery schemes agreed upon with suppliers. Submissions must be made electronically at least five (5) days prior to the intended release of monthly consumer bills.
The directive specifically applies to DUs with an increase in their blended generation rate of more than one peso per kilowatt-hour (P1.00/kWh) compared to the previous supply month.
The measure is anchored on the government’s broader efforts to cushion the impact of rising global fuel prices—driven by ongoing hostilities in the Middle East—on electricity costs and overall consumer welfare. By requiring advance submission of rate adjustments, the ERC aims to closely monitor price movements, validate cost increases, and determine appropriate mitigating measures before these are passed on to consumers.
For consumers, an increase of more than P1.00/kWh in the generation charge can significantly affect monthly electricity bills, particularly for households with higher consumption or those already vulnerable to rising living costs. The generation charge, which typically accounts for the largest portion of electricity bills, fluctuates depending on the cost of power supply sourced by DUs. As fuel prices rise globally, generation costs also increase, leading to higher electricity rates.
To mitigate the impact, DUs in coordination with their suppliers are encouraged to submit staggered recovery schemes, allowing consumers to pay for the increase over a period of time rather than in a single billing cycle. This approach helps ease the immediate financial burden on households while ensuring that legitimate costs are recovered in a manageable manner.
ERC Chairperson and CEO Atty. Francis Saturnino Juan emphasized the importance of proactive regulatory oversight during this period of global uncertainty.
“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.”
“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,” Juan said.
Through this directive, the ERC reaffirms its commitment to transparency, accountability, and consumer protection, particularly in times of crisis, while working closely with the Department of Energy (DOE) and other government agencies to ensure available, stable, and reliable power supply in the country.
