What It Means
- The Green Energy Auction was designed to lower electricity rates by making renewable developers compete, and the regulator’s own evaluation found that almost none of them did.
- Nearly all bid submissions copied the government’s maximum price ceiling instead of bidding under it, so the contest set rates near the cap it was meant to push prices below.
- The winning capacity went mostly to projects controlled by the country’s largest conglomerates, the only players able to fund pumped storage and geothermal at that scale.
- The cost reaches households and businesses through the Green Energy Auction Allowance, a charge that recovers these contract costs from ratepayers.
- The regulator who flagged the problem resigned three years into a fixed term, and the next two auction rounds were awarded on the same rules.
The Green Energy Auction was supposed to make electricity cheaper. The government built it as a contest. Renewable energy developers would compete to supply power at the lowest price, and that competition would pull rates down while the country moved off coal. The third round did not work that way. The Energy Regulatory Commission examined the offers and found that 99.86 percent of submissions copied the maximum price the commission had set as a ceiling, not as a target. A contest built to produce price competition produced almost none. The Philippine Center for Investigative Journalism surfaced that finding in June 2026 from an internal ERC report, and it reframes a clean energy program the government has been selling as a win for consumers.
The Green Energy Auction Was Sold as a Win and the Regulator Says It Was Not
The Green Energy Auction Program is the government’s main tool for hitting its renewable targets, 35 percent of generation by 2030 and 50 percent by 2040, up from a quarter last year. The third round opened in February 2025. The Department of Energy called it a success on the day, pointing to roughly 7,500 megawatts of bids against an installation target of about 4,650. More interest than capacity on offer looked like proof the market was working.
The Energy Regulatory Commission read the same bids differently. In an internal evaluation addressed to then energy secretary Raphael Lotilla, then ERC chairperson Monalisa Dimalanta documented that almost every submission had simply copied the commission’s ceiling figures rather than pricing below them. The report called it a “critical disconnect between regulatory intent and practical implementation.” Strong bidder turnout and weak price competition are not the same thing. The volume the department celebrated and the pricing the commission flagged were two readings of one auction, and only one of them reaches the bill.
The Design Could Not Produce Competition
The deeper problem is not that companies behaved badly. It is that the third Green Energy Auction was built in a way that made real price competition unlikely from the start.
The technologies on offer in this round were impounding hydro, pumped storage, and geothermal. These are slow and expensive to build, and they come in large blocks rather than small increments. A developer needs a strong balance sheet, secured sites, and years of lead time to bid at all. That narrows the field to a handful of established players before a single offer is submitted. When a lot draws only two or three credible bidders, none of them has much reason to undercut the others. The ceiling the regulator set as a backstop becomes the obvious place to land.
One detail in the ERC report shows how thin the margin was. The commission noted that the removal of a single qualified competitor, a 52 megawatt geothermal plant in Batangas, was enough to let the remaining bidders raise their offers. An auction that swings on the presence of one mid sized plant was never going to deliver the price war the program promised. The competition existed on paper. The structure did not support it.
The Offered Bids and the Awarded Rates Are Not the Same Number
This is where the popular version of the story overreaches, and where the distinction matters for anyone reading it.
The investigation leads with the sharpest figures. First Gen’s Energy Development Corporation offered ₱12.2867 per kilowatt hour for a new plant in Negros Occidental, about 60 percent above the ERC’s maximum, and ₱9.9316 for an existing Mindanao facility, close to double the cap. Those numbers are real, and they are alarming on their own. They are also offers, not awarded rates.
The commission ran a financial review before anything was finalized, and the rates that actually cleared were lower. The awarded geothermal rates for that same developer landed between ₱5.1092 and ₱7.6441 per kilowatt hour. Impounding hydro from the largest winner cleared around ₱4.50 to ₱4.75. One pumped storage project cleared at ₱2.5787. The regulator pulled the awarded numbers down from the offers. That is the part worth holding onto. The brake worked while the brake was still there. The reason the next rounds matter is that the brake is the only thing that made the design survivable, and it has since been weakened.
The Cost Still Reaches Households Through the Allowance
Lower than the offers is not the same as low. The third Green Energy Auction committed about 6,677 megawatts of capacity for delivery between 2025 and 2035, more than 2,000 of it beyond what the department had previously planned to procure. That capacity gets paid for. The recovery runs through the Green Energy Auction Allowance, a charge layered onto electricity bills to cover the gap between these contract rates and the market.
That allowance sits in the same stack of pass through charges that already shapes a typical bill, the layers added one law and one resolution at a time over two decades. Households consuming above the lifeline threshold and small businesses with no special rate carry it in full. They do not choose it, and they cannot opt out of it. As the third round’s projects come online through the early 2030s, their cost enters that line and stays for the life of the contracts.
The department’s defense has a fair point inside it. Much of the awarded capacity is pumped storage, which is paid partly for storage rather than raw generation. It absorbs power when supply runs ahead of demand and releases it at peak, which the grid genuinely needs as more solar and wind come on. An energy undersecretary told the investigation the country needed guaranteed capacity by a certain time. That is a real argument. It does not erase the pricing question. It means the bill carries both a storage service worth paying for and a competition failure that was not.
The Winners Were the Only Players Big Enough to Bid
The list of awardees reads like a map of who can afford to build at this scale. Pan Pacific Renewable Power took the largest block at about 2,300 megawatts, including a 2,000 megawatt pumped storage project in Apayao. Affiliates of Enrique Razon Jr.’s Prime Infrastructure took a 600 megawatt project in Rizal and a 1,400 megawatt project in Laguna. A San Miguel linked developer took three pumped storage projects totaling 1,850 megawatts across Benguet and Aklan. The Lopez family’s First Gen, through its Energy Development Corporation and a geothermal affiliate, took the geothermal awards.
The investigation frames this as the country’s richest tycoons capturing the clean energy push. The structural read is narrower and harder to argue with. Scale was the filter. A Green Energy Auction that puts multi billion peso pumped storage lots up for bid will be won by the few groups that can finance them, whatever the intent of the rules. That is not a loophole someone exploited. It is the predictable result of pairing an ambitious capacity target with technologies only a handful of firms can deliver, then running a price contest on top and expecting the price to fall.
The Regulator Who Flagged It Is Gone and the Next Rounds Are Not
In July 2025, two months after the awards were issued, Monalisa Dimalanta filed an irrevocable resignation as ERC chairperson. Her fixed term ran to 2029. She left in August, three years early, after a tenure that included a preventive suspension and a reinstatement. On her way out she told reporters to watch the commission’s coming decisions closely, because they would reveal “which groups are being favored.”
The sequence belongs in the record, stated plainly and without a motive attached to it. The official who authored the report on the auction’s pricing problem left the regulator shortly after the auction closed, and the auction stood. Nothing in the public record ties her exit to this program, and the picture is not a simple one. Dimalanta herself came to the ERC from AboitizPower, one of the country’s large power groups, the second of the administration’s energy appointees with that background. The regulator who named the flaw was not an outsider to the industry the flaw benefited.
What is not in question is the design’s reach. The fourth Green Energy Auction was awarded in November 2025, more than 10,000 megawatts across more than a hundred projects, run on the same model. A fifth round is moving. The commission that produced the warning is now staffed by commissioners who inherited the finding rather than wrote it, after a stretch where the body lost the quorum it needed to decide anything at all.
The third Green Energy Auction is a signed contract now, not a proposal. The rates hold to 2035, the next two rounds cleared on the same design, and the regulator that named the flaw has been replaced by people who inherited it. The transition will get built either way. The cost of a contest that did not lower prices settles onto the same bills the program was sold to lighten.
More developments that reshape the operating environment in National Signal section of Hemos PH.
