The Energy Regulatory Commission will install a new price cap on traded electricity to protect the public from ‘exorbitant’ and sudden increase in power rates.
ERC Executive Director Francis Saturnino S. Juan said a new Price Threshold Mechanism (PTM) will be issued by January next year. The PTM will be similar to the secondary price cap introduced by ERC early this year at the Wholesale Electricity Spot Market (WESM).
The WESM is the country’s spot market wherein electricity distributors can purchase additional supply from power plant operators.
Juan, however, said the commission is still crunching numbers to include inputs from the recent public consultation for the PTM.
The ERC has set a secondary price cap of P6.245 per kWh for the May and June power supply months to forestall the big jump in electricity prices after the fiasco in November and December last year.
Spot market prices increased to all-time highs in November and December last year.
According to the ERC’s decision, the cap will remain in place until the establishment of a permanent pre-emptive mitigating measure in the WESM is established.
Based on the present set-up, the secondary price ceiling remains in force until succeeding offers of power plants drop below the trigger price of P8.186 per kilowatt-hour (kWh).
Juan also said that the secondary price cap could possible be raised.
The ERC, he added, has yet to renew on expectations that WESM prices won’t increase this month as the secondary price cap lapsed on December 8.
The ERC has been investigating the WESM trading of power suppliers during that period due to the alleged price manipulation that spurred the controversial December 2013 power rates.
Juan said the ERC’s Investigating Unit (IU) has yet to come up with the results of its investigation.
“Once they have completed their studies and findings they will forward their recommendation to the ERC,” added Juan.