DOE warns of power price hikes amid El Niño

The Department of Energy (DOE) is preparing for higher electricity demand and possible supply constraints as El Niño brings hotter and drier conditions, warning that power prices could rise in the coming months.

Energy Secretary Sharon Garin said increased demand and tighter supply could push prices up in the Wholesale Electricity Spot Market (WESM), prompting the DOE to coordinate with the Energy Regulatory Commission (ERC) to guard against possible market abuse.

Garin said prolonged heat and dry conditions could also affect power generation, as declining river levels may limit hydropower output while extreme temperatures could reduce the efficiency of coal-fired plants.

The DOE is exploring alternative supply options to address potential shortfalls, but Garin urged consumers to start conserving electricity as temperatures climb.

Meanwhile, Garin said China’s restrictions on fuel exports have not disrupted Philippine oil companies’ existing supply contracts, despite the country’s reliance on Chinese shipments for part of its liquefied petroleum gas, gas and diesel requirements.

China accounts for about 21% of the Philippines’ LPG supply, 5% of its gas supply and 25% of its diesel supply, according to the energy chief.

She said local oil companies continue to receive deliveries under existing and long-term contracts, although fuel prices are expected to remain elevated over the next few months and are unlikely to return soon to pre-conflict levels.

Garin also said the bidding for the Semirara coal contract is scheduled for late November or early December. Coal production will continue even as the current contract runs until 2027, she added.

However, she noted that Semirara alone cannot substantially alter the country’s overall coal supply situation, as about 95% of Philippine coal is imported.