The Energy Regulatory Commission (ERC) commits to have thoroughly evaluated and resolved the proposed changes to the secondary price cap (SPC) mechanism governing price movements at the Wholesale Electricity Spot Market (WESM).
The SPC serves as a consumer protection tool against unwarranted increases in electricity prices due to the inherently volatile market price movements at the WESM by lowering the clearing price of electricity to P6.245 per kilowatt hour (kWh) when the average price breaches the threshold of P9 per kWh over a 72-hour period.
ERC chairperson Monalisa Dimalanta, at the sidelines of the Philippine Electric Power Industry Forum in Manila on Monday, said that among the changes considered include changing the threshold and the amount of adjustment.
According to Dimalanta, SPC was put in place only as an interim measure and only for certain occasions but subsequently became a permanently placed cap.
“We should look at its effect and all these things need to be reviewed and considered once we revisit SPC as a framework or as a mechanism,” Dimalanta said.
The ERC on the same day said the policy review should also result in a cap that is “more aligned with reality.”
Anne Estorco-Montelibano, Philippine Independent Power Producers Association (PIPPA) executive director, said they have submitted a position paper to the ERC explaining their views on needed changes for the SPC.
Montelibano said the lobby group sees SPC as something that can be removed and allow the electricity market to “move naturally.”
“The feared price increase is only going to be temporary since all markets move. But the more you curtail it, the more everything becomes skewed and it’s not the correct signal to investors. Let the market behave as the EPIRA (Electric Power Industry Reform Act of 2001) envisions.”
Anne Estorco-Montelibano, Philippine Independent Power Producers Association (PIPPA) executive director
