MANILA, Philippines — The Energy Regulatory Commission (ERC) has temporarily halted Reserve Market operations to curb persistently high ancillary service prices, especially in the Visayas.
Ancillary services, which provide backup power to help maintain grid stability, can be procured through bilateral contracts or the Reserve Market, where they are traded at spot prices.
Following its review of market data, the ERC found that reserve prices had remained elevated, with the Visayas and Mindanao experiencing the highest costs.
In 2025 alone, Reserve Market costs far exceeded those under ancillary service procurement agreements (ASPAs), exerting upward pressure on electricity bills nationwide.
ERC data showed that Reserve Market prices added as much as P1.29 per kilowatt-hour (kWh) to power bills last year, compared with a maximum of just P0.13 per kWh under ASPAs.
“Consumers, especially in the Visayas, have been paying reserve prices that are far more expensive than the energy they use and with what contracted reserves cost,” ERC chairman and CEO Francis Saturnino Juan said.
Under the order, commercial dispatch and settlement in the Reserve Market will remain suspended until further notice from the regulator.
During the suspension, the National Grid Corp. of the Philippines (NGCP) must source its reserve requirements exclusively from capacities covered by existing ASPAs or bilateral contracts.
Within 30 days, the grid operator must submit an assessment of its reserve requirements that remain uncovered by ASPAs, along with proposed must-run designations to address the shortfall.
It is also directed to secure its remaining requirements through competitive selection and direct negotiations.
As the sole buyer of reserves, the NGCP deploys ancillary services to keep the lights on even during sudden disruptions caused by power plant outages or unexpected surges in electricity demand.
Consumers shoulder the cost of these services through transmission charges, which typically account for about 10 percent of their electricity bills.
The Reserve Market is integrated into the Wholesale Electricity Spot Market (WESM), the centralized venue for electricity trading.
WESM operator Independent Electricity Market Operator of the Philippines expects the suspension of Reserve Market operations to bring down transmission charges.