The Energy Regulatory Commission (ERC) is eyeing a lower secondary price cap (SPC) in the Wholesale Electricity Spot Market (WESM) to fight the increase in electricity prices.
The regulatory body recalculated the secondary price cap in WESM at PHP4,502 per megawatt-hour (MWh) from the existing Php 6,245/MWh.
The goal is to bring better competition to the market, according to Commissioner Catherone Maceda.
“However, we have to realize that we also have the consumers into rest that we need to protect,” she was quoted in a Philippine News Agency report.
A hearing was called after the persistent power alerts on thinning reserve power from March to June 2019.
The ERC used the pricing methodology under Resolution No. 04, Series of 2014, which adopted and made permanent the pre-emptive mitigating measure in the WESM.
The drafted resolution stated that recent developments in the electricity market pushed the regulatory agency to review existing threshold levels of the secondary price cap schemes, as well as recompute the same based on current market data in periods of 2016 to 2018.
The recalculated cumulative price threshold (CPT) level to Php 6,919/MWh, which is equivalent to the generator weighted average price over a rolling three-day period or 72-hour trading interval in the WESM.
Stakeholders can submit their written comments on the draft resolution until November 22.
Laban Konsyumer Inc. president Victor Mario Dimagiba said the WESM market is “very sensitive” to supply consumption situations.
“We in the consumers’ group, anything lower than what it is, of course, we support,” he said.
“The regulatory actions should be synergized, we should cooperate and those enforcement actions coupled with the price cap, and that should be really supporting consumers’ welfare,” Dimagiba added.