• ERC extends WESM secondary price ceiling by 120 days


    DESPITE resistance from power generators, the Energy Regulatory Commission (ERC) has extended anew the secondary price ceiling at the Wholesale Electricity Spot Market (WESM).

    In a resolution, the ERC extended the cap on the spot market’s secondary prices by 120 days from August 10, or until a permanent mitigating measure is adopted by the regulator.

    The ERC earlier approved the imposition of the secondary price cap for 45 days from May to June 25, and extended this up to August 9.

    The ERC’s approval came after prices on the WESM increased late in 2013 and early this year due to reduced power generation caused by the unavailability of a number of plants.

    This resulted in a record increase in Meralco’s rates in December 2013, which were first blocked by a temporary restraining order by the Supreme Court and subsequently ordered recomputed by the ERC to a lower level.

    The secondary price cap of P6.245 per kilowatt-hour (kWh) will take effect should the average offers of power generators at the WESM breach P8.186 per kWh over a 72-hour period.

    This was meant to prevent WESM prices from spiking amid limited power generation during the summer months. The secondary price ceiling will remain in effect until succeeding offers of power firms reduce the market average to below the P8.186 per kWh threshold.

    Before the imposition of the secondary price ceiling, the price cap at the WESM stood at P32 per kWh.

    The ERC also adopted a permanent pre-emptive mitigating measure that will be applied in the WESM. The Philippine Independent Power Producers Association Inc. (PIPPAI) earlier questioned the legality of the secondary price cap before the Pasig City Regional Trial Court, contending that the measure forces them to offer prices at the WESM not reflective of their costs.

    The group also maintained that the ERC could only intervene in the WESM on the grounds of national or security emergencies.


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