The Energy Regulatory Commission (ERC) has approved the upper limit of the secondary price cap (SPC) helping hold the Wholesale Electricity Spot Market (WESM) together, a mechanism meant to protect consumers from sharp price spikes.
Under ERC Resolution No. 26, Series of 2025, the SPC adjusted the so-called electricity clearing price to ₱7,423 per megawatt-hour (MWh) when average prices exceed ₱12,413 per MWh over s 72-hour timeframe.
Previously, the SPC lowered the price to ₱6,245 per MWh once the average price breached ₱9,000 per MWh over the same period.
The ERC also allowed oil-based and liquefied natural gas power plants to seek additional compensation if the SPC failed to cover their verified fuel and variable operating costs. This was granted only upon proof and verification by the Independent Electricity Market Operator of the Philippines. Other power generation technologies are not eligible for this compensation.
Business groups had earlier called for the removal, suspension, or adjustment of the SPC, arguing that price caps discourage investment in new power plants. Philippine Independent Power Producers Association executive director Anne Estorco-Montelibano previously said the SPC distorts market signals and should be removed to allow WESM prices to move naturally.
Price caps can weaken market signals needed, for instance, to encourage new capacity during shortages. Regulators therefore guard the mechanism to avoid undermining the market’s credibility.
But WESM price spikes have led to investigations, refunds, and public backlash in the past. This history makes regulators cautious in adjusting or removing the cap.
