Power Prices Soar: Rethinking EPIRA, Renewable Charges, and Energy Affordability
- May 15, 2026
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Electricity prices in the Philippines remain among the highest in Southeast Asia, placing sustained pressure on households and industries. While multiple factors contribute to this, the structure of power pricing has become increasingly complex due to layered charges, policy-driven levies, and long-standing systemic reforms.
While a major factor is that, unlike other Southeast Asian countries such as Indonesia and Malaysia, the government does not subsidize electricity costs, another significant contributor is the accumulation of government-mandated charges embedded in electricity bills. These include transmission charges and renewable energy support mechanisms, which, while policy-driven, ultimately increase the final cost to consumers.
Compounding these structural issues are fluctuations in global oil prices, which continue to influence overall energy costs and contribute to broader inflationary trends in the country. In April, inflation climbed to 7.2%, its fastest rate in over three years, as rising oil prices drove up food costs, particularly rice, as well as utility expenses. This marked a sharp increase from 4.1% in March and 1.4% a year earlier.
At the same time, electricity demand in the Philippines rises significantly during hot and dry seasons, when household and commercial use of cooling systems such as air conditioners and electric fans surges. This seasonal spike places additional strain on the power grid and contributes to higher peak demand pricing pressures.
Recently, the Philippine Statistics Authority (PSA) warned that higher electricity and water costs could further accelerate price increases as both utilities carry a significant weight in the consumer price index.
(Also read: DOE Supports Electricity VAT Relief As Lawmakers Push Lower Power Costs)
Is EPIRA Serving the People?
The Electric Power Industry Reform Act (EPIRA) of 2001 was enacted with the promise of restructuring the power sector to ensure the “reliability, security, and affordability” of the country’s electricity supply. It reorganized the industry into generation, transmission, distribution, and supply sectors, and introduced competition and privatization as mechanisms to drive efficiency.
However, more than twenty years later, questions remain about whether EPIRA has delivered on its promise of affordability.
The law also created mechanisms to recover stranded costs and debts from the restructuring of the sector, which were passed on to consumers through universal charges. Many of these costs remain embedded in electricity pricing decades later.
Additionally, EPIRA introduced reforms that required significant government financial adjustments, including addressing large accumulated debts in the power sector. This restructuring phase has had long-term implications for pricing stability and affordability.
“Did Epira champions envision a system that would prioritize private profits while passing every conceivable burden onto the household budget?” asked an editorial from the Philippine Daily Inquirer (PDI). “These run the gamut from system losses due to pilferage and lifeline subsidies for the marginalized to senior citizen discounts and renewable energy (RE) projects.”
The editorial went on to argue that consumers have effectively become the “default shock absorber” for a wide range of social and corporate costs. It questioned why charges such as lifeline subsidies and funding for the Pantawid Pamilyang Pilipino Program are embedded in electricity bills rather than financed through general taxation.
It also noted that incentives for RE, including Green Energy Auction Allowance (GEA-All) and Feed-in Tariff allowance (FIT-All), arguably reflect policy goals that should be funded by the government and private sector rather than layered onto consumer bills.
FIT-All and GEA-All: Are They Helping or Adding Pressure?
The FIT-All and GEA-All are designed to support RE development, but their impact on affordability has become a subject of debate. FIT-All was introduced to fund earlier RE projects under guaranteed payment schemes, while GEA-All supports newer RE developments under competitive auction systems.
Antonette Aquino, a Meralco customer, recently shared her electricity bill online, questioning the sharp increase despite little change in her consumption. She pointed in particular to the added charges for RE. “Two separate renewable energy levies running at the same time. The second one was quietly added to bills in February 2026,” she highlighted. “Both government-mandated. Neither one is optional.”
Starting January 2026, the GEA-All charge was set at ₱0.0371 per kilowatt hour (kWh) and imposed on all customers to fund RE projects. It is classified as a pass-through charge, meaning it is collected from consumers without adding to Meralco’s earnings.
Combined with the FIT-All, total RE charges reached ₱0.2382 per kWh in early 2026. While the rate appears minimal, its cumulative impact across millions of consumers translates to billions of pesos in annual cost recovery.
According to Manila Bulletin columnist Myrna Velasco, these charges lack clear statutory grounding under the EPIRA and the Renewable Energy Act. “Instead, it traces its origin to a Department of Energy (DOE) circular—an administrative issuance whose authority rests more on regulatory interpretation than a clear legislative mandate,” she wrote. “Consequently, its legal standing is on shaky ground.”
Velasco pointed out that the RE Act was originally designed to establish the Feed-in Tariff system, with the FIT-All explicitly grounded in law to support specific “emerging” renewable technologies such as wind, solar, and biomass. The policy was meant to be targeted, with defined mechanisms like the Renewable Portfolio Standard (RPS) requiring power suppliers to gradually increase their share of renewables, supported by structured incentives.
However, Velasco argued that newer mechanisms such as the Green Energy Auction and its corresponding GEA-All charge fall outside this original design. The law does not explicitly provide for such a system, raising questions about its legal basis and alignment with policy intent.
She noted that while the sector already benefits from multiple incentive programs and priority dispatch, adding new layers of charges may contradict EPIRA’s goal of reducing subsidies, effectively increasing the financial burden on consumers instead of easing it.
(Also read: Solar Industry Welcomes 3-Year Importer Accreditation Rule For Clean Energy Equipment)
The EPIRA Paradox: Reform vs Affordability
EPIRA aimed to introduce competition and efficiency in the power sector. However, electricity pricing remains heavily influenced by regulated charges and policy levies.
Shifting social costs to the national budget does not eliminate the burden, but it redistributes it more equitably. Electricity bills impose flat charges that apply to all users regardless of income, making them inherently regressive. In contrast, funding social programs through taxation allows costs to be spread more fairly, with those who have greater capacity to pay bearing a larger share.
Keeping these charges embedded in utility bills effectively transfers the government’s social responsibilities onto consumers. This setup places a disproportionate burden on the middle class, who end up financing broad social programs through their power bills, while shielding other sectors from directly sharing in those costs.
“The Department of Energy (DOE) often points to the progress of the national electrification rate, now at 91.15 percent,” stated the PDI editorial. “But reaching the last mile is an empty victory if power remains expensive.”
At its core, the issue is not just about electricity prices, but about equity. As policies evolve and new charges emerge, consumers continue to shoulder much of the cost. Ensuring affordable power will require more than reform—it will require rethinking how the burden is distributed. Without that shift, the promise of a modernized energy sector may come at too high a price for those it is meant to serve.
Source:
https://www.bworldonline.com/opinion/2026/05/08/748246/unpacking-the-power-bills
https://www.newswatchplus.ph/2026/05/05/dry-season-to-push-inflation-higher-psa
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/22261
https://opinion.inquirer.net/191460/the-simple-truth-about-epira
https://www.facebook.com/photo/?fbid=4506298383026396&set=a.1699031160419813
https://mb.com.ph/2026/04/27/no-solid-legal-basis-for-gea-all-charge-in-electric-bills
https://opinion.inquirer.net/191460/the-simple-truth-about-epira
