DOE eyes reserve market suspension amid power price concerns

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CEBUANO consumers could benefit from efforts to curb sharp electricity price spikes as the Department of Energy (DOE) considers suspending the reserve market and urges distribution utilities to review their power supply contracts amid the Visayas’ continuing supply concerns.

DOE Secretary Sharon Garin said the agency would refer the possible suspension to the Energy Regulatory Commission (ERC) after reserve market prices reportedly rose from around ₱10 to ₱20, with some reaching ₱30, during recent power supply difficulties.

Speaking at the Cebu Energy Summit at the Cebu Provincial Capitol on Monday, Oct. 12, Garin said the DOE had also referred the matter to the Philippine Competition Commission for examination.

“If it’s just a ground for abuse of some of our generation companies, we might as well suspend it,” Garin said.

The reserve market provides services that help maintain grid stability when electricity supply is tight.

Garin said the National Grid Corporation of the Philippines (NGCP) should contract more ancillary services directly to reduce reliance on the reserve market.

For consumers, addressing unusual price spikes could help ease pressure on electricity costs.

However, any impact on household bills would depend on regulatory action and how changes in power procurement and generation costs are reflected in electricity rates.

Garin also urged electric cooperatives and other distribution utilities to review their power procurement portfolios, particularly their exposure to the Wholesale Electricity Spot Market (WESM), where prices can fluctuate depending on supply and demand.

Utilities that rely heavily on spot market purchases may face higher costs when power plants shut down or available electricity falls short of demand.

Reviewing contracts and diversifying supply sources could help utilities manage price volatility and provide consumers with greater cost predictability.

The DOE chief likewise called on utilities to reduce technical and non-technical system losses through better distribution infrastructure, metering and consumer records, as well as stronger measures against electricity pilferage.

The agency is coordinating with the National Electrification Administration to explore support for needed improvements.

The concerns are particularly pressing for Cebu, where electricity demand is growing by about 14 percent annually, compared with roughly 6 percent in other parts of the country, Garin said.

Figures presented during the summit showed that Visayas demand had reached 1,229 megawatts, against generation capacity of 863 MW.

The supply gap exposes households and businesses to continued power interruptions, while higher electricity costs can add to the burden on families and small enterprises.

Garin said the government must pursue immediate interventions alongside long-term investments in power generation and transmission, as the region prepares for the effects of El Niño.

The Cebu Energy Summit was organized by the Cebu Chamber of Commerce and Industry in partnership with the provincial government.(MyTVCebu)