The Energy Regulatory Commission (ERC) reported a rare occurrence of negative average electricity prices at the Wholesale Electricity Spot Market (WESM) during major holidays, highlighting a significant gap between supply and demand that has broad economic and commercial implications.
According to a statement issued Wednesday, negative pricing was recorded nationwide on Christmas Day (December 25, 2024), New Year’s Day (January 1, 2025), and Good Friday (April 18, 2025). The ERC traced the anomaly to an excess in available supply compared to significantly reduced consumer demand typical during holidays when industrial and commercial activity slows down.
On Christmas Day, average WESM prices dropped to minus P1.9338 per kilowatt hour (kWh), with supply reaching 20,575 megawatts (MW) against a low demand of 10,089 MW. A similar trend followed on January 1, with a price of minus P0.5592 per kWh, supply at 20,180 MW, and demand at 10,266 MW. Good Friday saw a price of minus P0.4014 per kWh with 21,469 MW in supply and only 12,092 MW in demand.
While consumers benefit from lower generation charges in their monthly bills, the ERC warned that the actual impact varies depending on each distribution utility’s energy mix and exposure to the WESM. The commission also noted that persistent negative prices could erode the feed-in tariff allowance (FIT-All) fund which finances the incentives extended by the government for renewable energy developers.
“This situation illustrates the growing complexity of market dynamics, where oversupply during low-demand periods can distort price signals,” said ERC chairperson Monalisa Dimalanta. She emphasized the ERC’s vigilance in ensuring that pricing reflects actual system conditions while safeguarding consumer interests.
Despite the drop in spot market prices, the ERC observed sustained high rates in the Reserve Market, with prices from 14 to 20 April reaching P5,453 per megawatt hour (MWh) in Luzon, P12,859 per MWh in Visayas, and P14,763 per MWh in Mindanao. This indicates an ongoing requirement for system reserves to maintain grid reliability.
The data underscores the critical importance of strategic energy planning, especially during non-peak periods, to balance economic efficiency, cost stability, and energy security.
