Philippines suspends Reserve Market over high backup power costs
The grid operator must rely on existing contracts during the halt and assess reserve needs not covered by its procurement agreements within 30 days.
The Philippines’ Energy Regulatory Commission (ERC) has suspended Reserve Market operations in an effort to limit high prices for backup electricity services, particularly in the Visayas. The regulator’s order stops commercial dispatch and settlement until it gives further notice.
An ERC review found persistently elevated reserve prices, with costs highest in the Visayas and Mindanao. Its figures showed that Reserve Market purchases increased electricity bills by as much as ₱1.29 per kilowatt-hour in 2025. The maximum contribution from ancillary service procurement agreements (ASPAs) was ₱0.13 per kilowatt-hour.
For the duration of the halt, the National Grid Corp. of the Philippines (NGCP) must obtain reserves only from capacity covered by existing ASPAs or bilateral contracts. The ERC has given it 30 days to assess requirements that ASPAs do not cover and propose must-run designations to fill the gap. NGCP must also procure its outstanding requirements through competitive selection and direct negotiations.
Ancillary services supply backup electricity to maintain grid stability when generating plants go offline or demand rises unexpectedly. NGCP is the only buyer of these reserves, which can be obtained under bilateral agreements or traded at spot prices through the Reserve Market.
Consumers pay for ancillary services through transmission charges, which generally represent about 10 per cent of their electricity bills. The Independent Electricity Market Operator of the Philippines, which operates the Wholesale Electricity Spot Market, expects the suspension to lower transmission charges. The Reserve Market forms part of that electricity trading system.
