The Energy Regulatory Commission (ERC) will issue amendments to an existing regulation that will further protect consumers from price spikes of power sold in the wholesale electricity spot market (WESM).
The regulatory body in a statement said it will change some provisions in Resolution No. 4, Series of 2017 which earlier introduced a cumulative price threshold (CPT) and imposed a secondary price cap (SPC) mechanism as a mitigating measure on the highly volatile nature of the WESM to prevent the possibility of market power abuse.
From a rolling average period of 120 hours for the CPT, the ERC lowered it to 72 hours and also introduced a regional imposition of the SPC mechanism that will only be applied when the grid interconnection is on outage.
“Because of the imposition of the SPC in May 2021, average price in WESM was at P7,428 per megawatt hours (MWh) instead of P8,120 per MWh. That is for the five days rolling average. If reduced to three days rolling average, resulting price would have been P6,338.66 per MWh,” said Agnes Devanadera, ERC’s chairperson, in a statement.
With the adjustment, the imposition of the SPC at P6,245 per MWh will be made upon breach of a P9,000 per MWh rolling average price over a three-day period.
The ERC said it conducted studies to improve the existing mitigating measures which were presented to concerned stakeholders through public consultations held in November 2019.
Comments gathered from the stakeholders during the consultations were considered in the amendments that will be made official in a resolution that the commission will promulgate in the coming days.
“The commission is cognizant of the country’s need for additional capacity which will come from new investments. Nonetheless, we also need to implement mitigating measures such as the SPC in consideration of the paying capacity of the majority of the consuming public in pursuance of our mandate to exert efforts to minimize price shocks for the protection of consumers,” Devanadera said.
Meanwhile, the Philippine Rural Electric Cooperatives Association (PHILRECA) said the shortage in power supply in the Luzon Grid caused an average of P1.3037 per kilowatt hour increase in residential power rates of electric cooperatives (ECs) in the region for the month of June.
The group said 26 ECs or 59.1 percent in the Luzon Grid confirmed that the rate of electricity rose due to the current power supply shortage.
However, Janeene Depay-Colingan, PHILRECA executive director and general manager, said these increases in rates are beyond the control of the ECs.
“We should understand that in this case, the ECs are just collection agents of generation companies. The increases that the consumers see in their bills are actually increases in generation charges. Distribution, supply and metering are the fees that are collected by the ECs for the maintenance of the ECs’ operations,” Colingan said.
Meanwhile, Presley De Jesus, the group’s president, said the government regulatory and policy agencies must stop finger-pointing and find a way to solve the supply problem.
“We will do what we can to educate our consumer on demand-side management but we can only do so much. This is more of a supply concern and we are hoping that the government’s Energy Family will step up to resolve this problem once and for all,” he said. -J. Macapag
