The Energy Regulatory Commission (ERC) is set to decide by the third quarter on the proposed changes in the implementation of secondary price caps (SPC) in the wholesale electricity spot market (WESM).
SPC serves as a consumer protection from unwarranted increase in electricity prices due to the inherent volatile market price movements in the WESM by lowering the clearing price of electricity to P6.245 per kilowatt hour (kWh) when average prices breach the threshold of P9 per kWh over a 72-hour period.
Monalisa Dimalanta, ERC chairperson, said at the sidelines of the Philippine Electric Power Industry Forum in Manila yesterday one of the changes being considered is to change the threshold.
“The SPC is price triggered and the immediate reaction is to only adjust prices but let us revisit what is its purpose… SPC was there only as an interim measure and only for certain occasions and then it 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 said the review of the policy will also result in a cap that is “more aligned with reality.”
Meanwhile, Anne Estorco-Montelibano, Philippine Independent Power Producers Association executive director, said in the same event SPC can be removed to let the market “move naturally.”
“The feared price increase is only going to be temporary … the more you curtail it, the more everything becomes skewed and it’s not the correct signal to investors. Let the market behave as EPIRA (Electric Power Industry Reform Act of 2001) envisions,” Montelibano said – Jed Macapagal
