Yellow Alerts may trigger February power rate hike

WESM high bill

Households may face higher electrical bills in February as rates in the Wholesale Electricity Spot Market (WESM) spiked after last week’s Yellow Alerts in the Luzon Grid

Based on a Manila Bulletin report, initial data from WESM operator Independent Electricity Market Operator of the Philippines showed that the secondary price cap went up to Php6.245 per kilowatt-hour. This price was triggered for at least seven days out of the 19 trading days in the current supply month. 

The Energy Regulatory Commission (ERC) said that these price hikes have been logged in different trading intervals in the spot market. These, in turn, may cause an increase in electricity prices to consumers. 

The forced outages of several power plants coinciding with the de-rating of other power facilities had taken out 2,265 megawatts of power capacity, causing an “insufficiency of reserves” led to last week’s Yellow Alerts.

January is usually a low-demand month due to the cold weather. And with the COVID-19 pandemic at bay, business establishments are not yet on full operations. Demand during the Luzon Yellow Alerts on January 10 and 11 were at 8,139 megawatts (MW) and 8,120MW, respectively – around 2500 megawatts lower than the average demands during the summer months. 

The ERC has yet to make a commitment to investigating the issues experienced by the power plants. Meanwhile, officials of the Department of Energy (DOE) met with counterparts from the National Grid Corporation of the Philippines on Friday to discuss the matter.

Based on the DOE’s outlook in October 2021, the projected peak demand for 2022 is seen to reach 12,387MW in May – 747MW or six percent higher than last year’s actual peak demand of 11,640MW.