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When Davao Light took over franchise areas previously served by the Northern Davao Electric Cooperative (NORDECO), it carried with it a promise of more reliable and affordable electricity. But nearly a year later, that promise is being put to the test as consumers face significantly higher power bills.
Davao Light’s residential rate climbed from ₱9.71 per kilowatt-hour (kWh) in December 2025 to ₱13.09 per kWh for the July 11 to August 10, 2026 billing period. The utility has pointed to rising generation charges, including higher-priced electricity from the Wholesale Electricity Spot Market (WESM), where supply constraints and changes in the availability of power plants have pushed costs upward.
That gap between promise and reality is particularly striking given why Davao Light entered the area in the first place.
For years, consumers had complained about NORDECO’s high electricity costs and unreliable service. In early 2025, the issue reached the Senate, where lawmakers pointed to Department of Energy (DOE) data showing that NORDECO customers were paying roughly ₱3 to ₱4 more per kWh than Davao Light customers while also enduring longer power outages.
The comparison helped drive the push to expand Davao Light’s franchise. Republic Act 12144, which took effect in April 2025, extended its coverage to Tagum City, Samal Island and parts of Davao del Norte and Davao de Oro. By December, the Energy Regulatory Commission (ERC) had granted Davao Light provisional authority to operate in the new areas, beginning the transition from NORDECO.
Davao Light was therefore expected to offer what NORDECO had struggled to provide: cheaper, more reliable electricity. Nearly a year into the transition, however, rising rates have put that expectation under fresh scrutiny.
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Push for Lower Electricity Rates
The Davao Consumer Movement (DCM) urged Davao Light to strengthen its long-term power supply, improve reliability, and reduce its exposure to the volatile market. According to DCM convenor Ryan Amper, consumers need more transparency on how utilities plan for future demand, secure enough contracted power and manage exposure to WESM prices. Unlike fixed bilateral contracts, WESM prices shift with supply and demand, leaving utilities vulnerable to sudden cost increases.
The group warned that heavy reliance on the spot market could lead to steep and unpredictable increases in electricity bills, particularly when contracted supply falls short of demand.
“We demand that Davao Light immediately conduct a Competitive Selection Process to secure competitively priced, long-term power supply agreements with reliable generation plants,” stated Amper. “This would help reduce dependence on volatile spot-market purchases and provide greater price stability for consumers.”
The Davao City Council is also pushing Davao Light to secure more power outside the volatile WESM. It approved resolutions urging the utility to pursue long-term bilateral Power Supply Agreements (PSAs) and interim emergency supply deals with Therma South Inc. (TSI) and other baseload generators.
Councilor Louie John Bonguyan explained that additional contracts could help shield consumers from WESM price spikes and potentially bring down bills within months if cheaper baseload power is secured. Additionally, the council also urged Davao Light to look beyond its existing supply contracts and, where permitted, tap other available generators in Mindanao for additional power.
What Davao Light Has Done So Far
To cushion consumers from supply constraints and rising generation costs, Davao Light secured regulatory approval to spread part of the higher charges over several billing periods. It has also pursued additional power allocations, including from the Power Sector Assets and Liabilities Management Corp. (PSALM), to bolster supply.
“We note that PSALM is one of the cheapest sources of power here in Mindanao, so for us to enjoy an additional allocation will help reduce the rates,” said Davao Light President and COO Enriczar Tia. “We thank the City Council for that resolution. I think it prompted PSALM to act quickly on our request.”
As of Aug. 5, Davao Light was negotiating a short-term Emergency Power Supply Agreement (EPSA) with TSI to add capacity amid supply constraints. TSI has about 20 MW of excess capacity available under the proposed deal.
DLPC President and COO Enriczar Tia said the agreement could take effect within one to two months, pending approval from the ERC and the DOE.
WESM prices surged past ₱10 per kWh after several generating plants went offline unexpectedly, including units affected by a strong earthquake in the Sarangani area. Spot-market prices typically rise when available supply tightens, particularly during plant maintenance or forced outages.
In early August, the DOE also warned that repeated yellow and red alerts in the Visayas and Mindanao grids could translate into higher electricity rates in the coming months.
While WESM purchases are now contributing to Davao Light’s higher electricity costs, the spot market has also shown how access to additional supply can help bring prices down. Before WESM was introduced in Mindanao, utilities such as Davao Light largely relied on bilateral contracts with generators. That meant excess power from plants outside those contracts could remain inaccessible even when a contracted plant went offline.
WESM changed that by giving utilities another source of electricity, allowing them to buy from generators they did not have bilateral agreements with. In 2023, Davao Light said its participation in WESM helped lower power costs; the DOE recorded an average Mindanao WESM price of ₱5.40 per kWh from January to April that year.
Bilateral contracts remain important for securing dependable supply, but WESM can fill gaps when contracted capacity falls short—and can offer savings when spot prices are competitive. The broader point is clear: having enough generation available is a key factor in keeping electricity prices in check.
(Also read: Agus-Pulangi Rehab Seen To Bolster Mindanao Power Reliability)
Securing More Power Generation
Mindanao’s power surplus does not necessarily mean cheaper electricity for Davao consumers. DOE-Mindanao official Darwin Galang noted the region’s reserves recently ranged from 729 megawatts (MW) to 1,060 MW, but part of that capacity is exported to the Visayas through the inter-island grid.
Galang added that when more affordable baseload plants are unavailable, more costly generators such as diesel plants may be tapped, pushing up generation costs.
The city council is also looking beyond short-term fixes, urging TSI to assess whether it can proceed with the second phase of its power plant. TSI was previously authorized to develop up to 645 MW, but only 300 MW is currently operating.
More power generation is also in the pipeline. DOE-Mindanao has identified 30 committed projects totaling 1,324 MW for deployment from 2026 to 2031, while another 37 proposed projects could add 3,257 MW if developed.
The council is also keeping an eye on the Agus-Pulangi hydropower complex, whose current power allocation remains available. Bonguyan said preserving its supply is important because hydropower can be cheaper than some thermal sources, although the aging facilities need rehabilitation to restore lost capacity.
For Bonguyan, the longer-term answer is to expand reliable power generation across Mindanao and the country, rather than simply manage price increases. If rates remain high by September or October, he said the council will continue pushing for additional supply and new generation capacity.
Meanwhile, Davao Light has urged consumers to manage their electricity use while the power supply situation is expected to stabilize in September. Spokesperson Fermin Edillon said households should pay closer attention to their consumption, not just the rate per kilowatt-hour, when trying to keep bills down.
Edillon also rejected the idea that Davao Light’s expanded coverage in the Davao Region is driving the recent rate increase, saying the wider service area is not the cause of higher power prices.
“We’re hoping that our rates will decrease,” he stressed.
For DCM, its previous support for the franchise expansion comes with a responsibility to hold Davao Light accountable. “Because we actively backed this expansion, DCM holds a heightened duty of care to the public. It is precisely this direct involvement that fuels our concern today,” stated Amper.
Davao Light, for its part, has a responsibility to secure enough power at competitive prices and to protect consumers from avoidable cost swings. Its efforts to defer some charges, seek additional supply, and negotiate agreements show that it is taking steps to address the immediate pressure. But whether these measures will translate into meaningfully lower bills remains to be seen.
The bigger challenge, however, goes beyond Davao Light. Sustained relief will depend on expanding reliable generation, strengthening the grid, and ensuring that affordable power can reach consumers across Mindanao and the rest of the country. For Davao consumers to truly benefit, the power sector must address the supply constraints driving prices—not just manage their effects.
Sources:
https://opinion.inquirer.net/181574/a-power-sector-alphabet-soup
https://www.sunstar.com.ph/davao/nordeco-appeals-to-pbbm-prevent-passage-of-bill
https://lawphil.net/statutes/repacts/ra2025/ra_12144_2025.html
https://www.sunstar.com.ph/davao/davao-light-gets-green-light-to-connect-new-customers
https://mb.com.ph/2026/08/04/davao-city-council-urges-davao-light-to-secure-additional-power-supply
