MANILA, Philippines - The Energy Regulatory Commission (ERC) is studying to put in place a single market threshold on the electricity spot market to protect consumers from sudden electricity rate spikes and at the same time ensure returns to investors.
“We’re studying what’s the best measure we can put in place, but we don’t want to call it a cap, because we want to balance the needs of investors and consumer protection,” ERC commissioner Josefina Patricia Asirit said during a public consultation hosted by the regulator and the Philippine Electricity Market Corp. (PEMC) in Pasig City yesterday.
“We don’t want it too high that it will run away with prices that are crazy, but we don’t want it too low that all generators will converge at that level,” she noted.
Asirit said the study is targeted to be completed by September.
Currently, the ERC has in place an average price threshold of P9 per kilowatt hour and a secondary cap of P6.245 per kwh on the Wholesale Electricity Spot Market (WESM) should the former be breached.
WESM is the country’s trading floor for electricity.
Asirit said the ERC, Department of Energy (DOE) and PEMC will meet to decide on the new threshold for WESM.
“The ERC, DOE and PEMC will meet to come up with permanent market cap and study if the secondary cap is still needed or we’ll just have one that will harmonize the average price threshold and the secondary cap,” she said.
The ERC imposed the price cap after prices at the WESM soared by P4.16 per kwh in December 2013 on violation of power generators during the month-long Malampaya natural gas field shutdown in late 2013.