Energy security via more hydro storage and RES
February 12, 2026 | 12:00am
https://www.philstar.com/business/2026/02/12/2507363/energy-security-more-hydro-storage-and-res
We can attain higher energy security via four mechanisms: more baseload or 24/7 power generation, more mid-merit and peak-load plants for high demand hours and days, a resilient transmission system and efficient distribution utilities (DUs) and retail electricity suppliers (RES).
Hydro pumped storage
Last Monday, Feb. 9, the Thunder Consortium officially acquired the 797-MW Caliraya-Botocan-Kalayaan Hydroelectric Power Plant (CBK HEPP), a hydro pumped storage (HPS) facility in Laguna.
The Thunder Consortium is led by Aboitiz Power (AP) and partners Sumitomo Corp. and Electric Power Development Co. Ltd. (J-Power). They won the bidding process conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM) last July, with the acquisition approved by the Philippine Competition Commission (PCC) last November.
President Marcos led the ceremonial turnover together with PSALM, led by Finance Secretary Frederick Go and AP chairman Sabin Aboitiz. Also at the ceremony were Japan Ambassador Endo Kazuya, Energy Secretary Sharon Garin, Trade Secretary Ma. Cristina Roque, Napocor president Jericho Nograles and other Philippine government officials and representatives from Japanese consortium partners Sumitomo and JERA.
The CBK HEPP, particularly its Kalayaan HPS, is a critical energy buffer for the Luzon grid. It provides multiple functions: storing water/energy at the top, reducing flash flooding during heavy rains, dispatching power when needed, strengthening grid stability, providing essential ancillary services and contributing to real renewable energy (RE) generation.
On the fiscal side, the Department of Finance via PSALM is happy to get P36.3 billion in new revenues from the CBK privatization. The PCC is reminded that they need to hasten approval of important acquisitions. And the privatization of remaining big hydro plants like Agus-Pulangi should be hastened to generate more government revenues without resorting to new taxes and regulatory fees and make the hydro plants become more efficient.
More RES
The Energy Regulatory Commission (ERC) made a significant reform in the retail electricity market by lowering the eligibility threshold for participation in the Retail Competition and Open Access (RCOA) program, allowing more consumers to choose their electricity supplier.
Effective June 26 this year, the minimum demand requirement to qualify for RCOA will be reduced from 500 kilowatts (kW) to 100 kW. This will broaden access to retail competition and empower electricity consumers to exercise supplier choice. The Retail Aggregation Program (RAP) is also covered so multiple end-users in the same location can aggregate their electricity demand and collectively participate in the retail electricity market.
Consumers who are dissatisfied with their ECs or served by corporate DUs but want lower rates via aggregation may now choose from other ERC-authorized RES depending on their location, demand profile and preferred contract structure. Among those authorized RES in the country are MGEN RES (formerly GESC) of Meralco PowerGen Corp. (MGEN), Advent Energy of AP, Vantage Energy and MPower of Meralco, SMELC of SMC and others.
Fiscal wastes by NEA
Another reason why consumers should have more choices in their electricity supply is the bad services by many ECs in the provinces like frequent blackouts or power fluctuations resulting from their unsustainable financial condition. Plus the endless drawdown of taxpayers’ money by the National Electrification Administration (NEA) that monitors and protects the ECs.
From 2012 to 2024, NEA received a total of P56 billion in subsidies from taxpayers, or an average of P4.3 billion per year for 13 years. The bulk of this is for providing loans and bailout money for ailing ECs.
Recently, the APEC party-list in Congress called for “universal debt restructuring” of ailing ECs. They do not want to pay the interest payments, surcharges and penalties and want other government corporations like Napocor and PSALM to shoulder these costs. But both are also dependent on subsidies. During the same period, 2012–2024, Napocor was getting an average of P1.5 billion per year while PSALM was getting P6.1 billion per year.
So APEC and the ECs may soon lobby that the NEA subsidy should further bloat or all electricity consumers in the country should pay for the financial problems of ailing ECs via a universal charge. Including consumers who are efficiently served by corporate DUs and RES and not by ECs. This is not good. The ERC should never grant such a potential lobby. ECs themselves should pay those financial costs.
NGCP’s MAR of P376.4 billion
The ERC recently approved the National Grid Corp. of the Philippines (NGCP) maximum allowable revenue (MAR) of P376.4 billion for 2023–2027, the 5th Regulatory Period. NGCP proposed P442.6 billion.
The ERC also approved this week NGCP’s Annual Revenue Requirement (ARR) of P375.0 billion, lower than its application of P442.6 billion over the same period.
A lower than requested MAR and ARR may be good for consumers, as the transmission charge in our monthly electricity bill can remain at around P0.60/kWh NGCP wheeling rate plus another P0.60–P0.70/kWh for ancillary services. But the problem is the rising share of intermittent solar-wind in the grid with no battery, usually in areas far from high-demand urban areas. Capital expenditure needs will be higher compared to more big conventional plants like coal and LNG plants, which are easier and more efficient to transmit electricity from.
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