To counter spikes on electricity: ERC eyes lower price cap at WESM

The Energy Regulation Commission (ERC) is looking at a lower secondary price cap (SPC) in the Wholesale Electricity Spot Market (WESM) to counter spikes in electricity prices.

It recalculated the secondary price cap in the WESM at PHP4,502 per megawatt-hour (MWh) from the existing PHP6,245/MWh.

Commissioner Catherine Maceda said the intention is not to unreasonably stifle the market growth but instead to come up with a better competition to happen.

“However, we have to realize that we also have the consumers into rest that we need to protect,” she said Monday during the price cap public consultation.

The hearing was called after the persistent alert warnings on thinning reserve power from March to June 2019.

In determining the secondary price cap, ERC used the process of recalculation utilizing the same methodology applied under Resolution No. 04, Series of 2014, which adopted and made permanent the pre-emptive mitigating measure in the WESM. ERC drafted a resolution adopting amendments to the pre-emptive mitigating measure in the WESM.

The draft resolution said the recent developments in the electricity market impelled the ERC to review existing threshold levels of the secondary price cap schemes, and recalculate the same based on current market data using the period 2016 to 2018.