Electricity consumers may see higher power rates in June after a series of red and yellow alerts in the Luzon and Visayas grids drove spot market prices to the maximum allowed level, the Energy Regulatory Commission said.

In a report by ABS-CBN News Channel (ANC) aired on May 20, ERC Chairperson Atty. Francis Saturnino Juan said prices at the Wholesale Electricity Spot Market (WESM) reached the capped price of PHP 32 per kilowatt-hour during the red alert periods from May 13 to 15.

The price spike occurred as the Luzon and Visayas grids experienced thin reserves and rotating brownouts.

“Bukas sa historically tuwing, ah, itong buwan na ito talagang mataas ang presuhan sa WESM, maaari makapagdagdag pa nga ‘yung nangyaring mga yellow and red alerts,” Atty. Juan said. (“Historically, prices in the WESM are really high during this month, and the yellow and red alerts that occurred could push them even higher.”)

Distribution utilities such as Manila Electric Company (Meralco) and electric cooperatives source part of their supply requirements from the WESM. Higher spot market prices are typically reflected in generation charges passed on to consumers.

The ERC chair’s remarks stand in contrast to earlier statements by Department of Energy Secretary Sharon Garin, who said this week the recent supply deficiencies would not necessarily lead to higher electricity rates

Consumer groups have criticized the prospect of passing the additional costs on to end-users, arguing that entities responsible for the outages should be held accountable.

But Atty. Juan said focusing solely on blame will not address the underlying issues.

“Kung ito ang gagawin nating usapan, maghahanap tayo ng kung sino ang pwedeng buntunan ng sisi, hindi natin masosolusyonan ‘yung problema. Ang problema ay magiging problema pa rin natin sa susunod na taon at sa mga susunod pang mga taon,” he said. (“If this is the kind of discussion we will have, where we look for someone to blame, we will not be able to solve the problem. The problem will remain our problem next year and in the years to come.”)

What are your thoughts on the ERC’s warning? Should consumers bear the cost of WESM price spikes, or should penalties on industry players help shield end-users from higher electricity bills?

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