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Davao Light and Power Co. (Davao Light) has attributed the latest increase in electricity rates to higher generation costs brought about by tighter power supply, stressing that the hike is not related to the utility’s expansion into Davao del Norte.
The utility appeared before the Davao City Council on July 21 after council members sought an explanation for the continued rise in electricity rates, which they said has placed an increasing financial burden on households, businesses and the city government.
For the July 11 to Aug. 10, 2026 billing period, residential electricity rates increased by ₱0.78 per kilowatt-hour (kWh), with the generation charge rising to ₱13.09 per kWh from ₱12.30 per kWh in the previous billing cycle.
Explaining The Increase
Davao Light President and Chief Operating Officer Enriczar Tia said the higher rates were driven by generation charges, which are passed directly to consumers under the Electric Power Industry Reform Act (EPIRA), and not by the company’s distribution charges.
“We all have to understand that these are generation charges; these are passed-on charges to the consumers. Davao Light doesn’t gain anything from this because we earn only from the distribution charge, which is fixed,” Tia said during the council hearing.
He explained that the company’s distribution charge remains unchanged unless adjusted with the approval of the Energy Regulatory Commission (ERC).
According to Tia, electricity prices increased after power supply became tighter due to scheduled maintenance shutdowns and unexpected outages at several generating facilities. He added that the magnitude 7.8 earthquake that struck offshore Mindanao in June also affected power plants, reducing available generation capacity and pushing up prices at the Wholesale Electricity Spot Market (WESM).
“The issue is not necessarily a complete lack of supply, but that available supply has become tighter than demand. When supply is limited and demand remains high, market prices naturally increase,” he said.
Tia also noted that global fuel prices and geopolitical developments continue to influence generation costs, particularly for coal-fired power plants that rely on imported fuel.
Council Seeks Answers
The hearing was prompted by concerns raised by Councilor Danilo Dayanghirang, chair of the Committee on Finance, Ways and Means, and Appropriations, who earlier called for a clearer explanation of the successive increases in electricity rates.
Dayanghirang pointed out that residential generation charges have climbed significantly, from ₱9.71 per kWh in December 2025 to ₱13.09 per kWh this month.
He said the continued increases have affected not only households and businesses but also the city’s finances, as higher electricity costs translate into increased spending for hospitals, health centers, schools, government offices, street lighting, and other public facilities.
“Almost two million residents of Davao City deserve a clearer explanation,” Dayanghirang said, adding that consumers have the right to understand why their electricity bills continue to rise.
Councilor Louie John Bonguyan likewise expressed concern over the impact of higher electricity rates on ordinary consumers, small businesses and students.
While acknowledging challenges such as natural disasters and volatile spot market prices, Bonguyan urged Davao Light, the ERC and the National Grid Corporation of the Philippines to work toward stabilizing power supply while promoting renewable energy. “Our people deserve affordable, reliable electricity, not endless hardship,” he said.
Expansion Not A Factor
Tia dismissed claims that Davao Light’s franchise expansion into parts of Davao del Norte contributed to the higher electricity rates.
He said the expansion has no effect on generation charges and could even benefit consumers in the future by allowing the utility to procure electricity from a wider pool of suppliers through competitive bidding.
Davao Light currently serves more than 500,000 customers and expects to add around 200,000 more connections as it expands its service area.
The utility is also seeking to procure an additional 100 megawatts of contracted power to lessen its exposure to volatile WESM prices.
To cushion consumers from the latest increase, Tia said the ERC allowed Davao Light to defer a portion of the higher generation charge over five months, from August to December 2026.
Without the deferment, he said, residential electricity rates could have exceeded ₱14 per kWh.
The ERC has likewise extended the temporary suspension of electricity disconnections for customers with unpaid bills during the August to October billing periods. However, Tia reminded consumers that unpaid balances will continue to accumulate and become more difficult to settle later.
Long-Term Solutions
Looking ahead, Tia said increasing generation capacity remains the most sustainable way to stabilize electricity prices in Mindanao and the rest of the country.
He disclosed that Therma South is studying the possible expansion of its existing power plant by adding another 300 MW, although the final capacity has yet to be determined.
Tia also expressed optimism that electricity rates could begin stabilizing between September and December once generating plants undergoing maintenance resume operations, provided there are no major weather disturbances or other disruptions.
Dayanghirang proposed that the city encourage more power generation companies to invest in Davao, saying greater competition could help bring down electricity prices. He also urged the city to explore policies promoting solar energy and called for a review of existing bilateral power supply agreements to ensure Davao receives priority access to affordable and reliable electricity.
Both the city council and Davao Light agreed that expanding power generation and strengthening long-term supply would be key to addressing the recurring spikes in electricity costs as Davao City’s electricity demand continues to grow.
Source:
https://mb.com.ph/2026/07/21/power-firm-explains-rising-electricity-rates-in-davao-city
https://www.sunstar.com.ph/davao/davao-light-invited-to-sp-over-rising-electricity-rates
