Generation costs still dominate electricity prices despite FIT-ALL charges

TABLE 1: On-grid Distribution Utilities with the Top 20 Highest Residential Electricity Rates in July 2026

The analysis further found that even with the projected additional ₱0.1348/kWh FIT-ALL charge, FIT-ALL would still account for only 1.82% to 2.35% of the total residential electricity rate among the 20 highest-priced DUs and ECs. This underscored that FIT-ALL remains only a small share of residential electricity rates, even in the areas with the country’s highest power prices.

Instead, electricity bills are still driven primarily by generation charges, which are influenced by fuel prices, wholesale electricity market conditions, and power supply procurement costs. Because many electricity providers still rely heavily on imported fossil fuels, electricity prices remain vulnerable to fluctuations in global fuel markets. These costs are automatically passed on to consumers.

This became particularly evident during the 2022 global energy crisis, when surging international coal and liquefied natural gas prices increased generation charges. During this period, FIT-ALL and renewable energy (RE) support charges remained relatively stable and contributed only marginally to overall electricity price increases.

“Electricity bills will remain vulnerable as long as the country remains heavily dependent on imported fossil fuels. The data points to a structural problem that generation costs are driving electricity prices, and the most durable solution is a more diversified energy mix anchored on indigenous renewable energy,” shared ICSC’s Energy Transition Advisor Alberto Dalusung III.

The Feed-in Tariffs (FIT) program and the Green Energy Auction Program (GEAP) were established to accelerate RE development, encourage competition, and expand the country’s electricity supply options. Projects developed under these mechanisms have helped grow the RE market by increasing RE supply and strengthening competition in electricity generation.

Although FIT-ALL and GEAP supported projects represent only a portion of the country’s RE portfolio, their benefits extend beyond the projects themselves. 

ICSC’s analysis indicates that these projects have contributed to lower wholesale electricity prices during periods of high RE output. The analysis found that FIT-ALL and GEAP projects reduced Wholesale Electricity Spot Market (WESM) settlement prices by roughly 10% during peak renewable output periods in 2025. These findings suggest that RE incentive mechanisms should be assessed not only on the charges they impose, but also on the long-term economic value they create for consumers and the power system.

While these benefits may not be immediately visible as separate line items on consumers’ electricity bills, they contribute to a more competitive and resilient power system. 

Continued expansion of indigenous RE can help reduce dependence on imported fossil fuels, lessen exposure to global fuel price volatility, and support more stable electricity costs over time, demonstrating that investments in clean energy can deliver benefits beyond increasing generation capacity. A growing RE market can create a more competitive electricity supply, unlock new opportunities for consumers and businesses, and support a power system that is better equipped to meet the country’s future energy needs.

APPENDIX

Appendix 1: On-grid Distribution Utilities with the Top 20 Highest Residential Electricity Rates in July 2026: Current Rates and Estimated Rates with an Additional ₱0.1348/kWh FIT-All Charge