BUSINESS

ERC eyes cheaper power through bigger plants

Maria Bernadette Romero · Oct 15, 2026, 9:33 AM

THE Energy Regulatory Commission is moving to strip value-added tax from system loss charges to ease electricity costs for Filipinos, but not before public consultations are held and confirmation from the Bureau of Internal Revenue. This move follows after President Ferdinand R. Marcos Jr. vowed in his last State of the Nation Address that he will not allow consumers to pay for electricity they do not use. — PHOTOGRAPH courtesy of ERC

Consumers could benefit from lower electricity costs in the long term as regulators allow the construction of larger power plants to boost supply, attract investments, and strengthen competition among electricity generators.

The Energy Regulatory Commission (ERC) said Wednesday it removed capacity restrictions on new generating units to pave the way for bigger power projects that could help meet rising electricity demand and bring more competitively priced power into the market.

Under Resolution No. 34, Series of 2026, the ERC lifted the previous limits of 600 megawatts (MW) per generating unit in Luzon and 150 MW in the Visayas and Mindanao.

The move gives developers flexibility to build larger generating units based on market demand, available technology, and the capacity of the transmission grid.

“By removing outdated capacity restrictions, we are opening opportunities for greater investments and additional power supply. More generation capacity can strengthen competition, improve energy security, and help achieve more competitive electricity prices for Filipino consumers,” ERC Chairperson and CEO Francis Saturnino C. Juan said.

The ERC expects the policy to encourage more investments in electricity generation, potentially increasing available supply and easing price pressures as demand continues to grow.

Additional generating capacity could also give distribution utilities more options when securing electricity supply contracts, allowing them to source power from a wider pool of suppliers.

For households and businesses, stronger competition among power generators could help moderate electricity rates over time, while adequate supply could reduce the risk of shortages and power interruptions.

However, the ERC clarified that lower electricity costs would not be immediate or guaranteed, as actual benefits would depend on the completion of new power projects, grid readiness, and prevailing market conditions.

To ensure that bigger power plants do not compromise electricity reliability, all proposed grid-connected generating facilities must undergo a System Impact Study conducted by the National Grid Corporation of the Philippines or its accredited providers.

The assessment will determine whether the transmission network can accommodate the additional capacity without affecting grid stability and security.

The ERC also directed the System Operator to review reserve requirements and ancillary services, which provide backup support to maintain a stable electricity supply, particularly with the potential entry of larger generating units.

“Our priority is not simply to add bigger generating plants, but to ensure that every additional megawatt contributes to a more dependable and efficient power system. Consumers must benefit from adequate supply, fewer risks of power interruptions, and fairer electricity costs without compromising grid safety,” Juan said.